By Jeffrey Sparshott
WASHINGTON-U.S. housing starts tumbled in November but remained at a level suggesting steady demand for single-family homes amid low interest rates and steady job creation.
Housing starts dropped 18.7% in November to a seasonally adjusted annual rate of 1.090 million, the Commerce Department said Friday. Permits, an indication of how much construction is in the pipeline, were down a milder 4.7% to 1.201 million.
Economists surveyed by The Wall Street Journal had expected November starts to fall to 1.23 million and permits to register at 1.24 million. Construction typically begins a month or two after a permit is issued.
The drop-off follows an especially strong October, which registered the highest number of overall starts since July 2007.
Single-family housing starts, which have accounted for about two-thirds of all activity since the recession ended, slid 4.1% to 828,000. They peaked at more than 1.82 million in 2006, the height of the housing bubble. Single-family permits rose 0.5% to 778,000, the highest level since November 2007.
Starts on structures with two or more units, which include apartments and condominiums, plummeted 45.1%. Permits sank 13.0%.
Monthly housing figures are choppy, have a significant margin of error and can be subject to large revisions. But the broader trend has been one of slow growth amid rising demand.
November's three-month moving average of single-family starts, which smoothes out some of the monthly volatility, registered at the highest level since the end of 2007.
Still, construction hasn't fully recovered since the housing bust, leading to a limited supply of new and existing homes for sale. That's pushed prices higher.
The National Association of Realtors last month said existing-home sales accelerated to the fastest pace in almost a decade even as prices have been rising faster than most Americans incomes.
Mortgage rates, meanwhile, have started to climb, potentially making homes less affordable. A 30-year fixed-rate mortgage averaged 4.16% for the week ending Dec. 15, up from 3.97% a year earlier and a 2016 low of 3.41% reached in July, Freddie Mac said.
That was before the Federal Reserve on Wednesday decided to raise short-term rates for only the second time in a decade amid rising optimism about the U.S. economy.
The Commerce Department's latest report on building permits and housing starts can be accessed at http://www.census.gov/construction/nrc/pdf/newresconst.pdf
Write to Jeffrey Sparshott at email@example.com.
(END) Dow Jones Newswires
December 16, 2016 08:45 ET (13:45 GMT)Copyright (c) 2016 Dow Jones & Company, Inc.