Housing starts disappoint in December

The pace of housing starts and building permits declined in December, according to the latest data from the Census Bureau.

Housing starts declined 2.5% to an annualized pace of 1.15 million homes.

Expectations were for the report to show starts rose 2.3% in December to an annualized pace of 1.2 million homes.

Building permits fell 3.9% to an annualized pace of 1.23 million, better than expected.

Building permits were expected to fall 6.4% to an annualized pace of 1.2 million.

In a note to clients following the report, Ian Shepherdson at Pantheon Macro said, “In one line: Starts dip is hard to fathom, but core permits are rising strongly.”

Shepherdson added, “The starts numbers are quite surprising, given the exceptionally warm December; usually, warm winter weather boosts activity. The construction employment numbers certainly pointed to rising starts, with net hiring of 93K in Nov/Dec combined, far above the underlying trend. Now we have to wonder what they’re all doing.”

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