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US home construction plunges in December
WASHINGTON, Feb 26, 2019 (BSS/AFP) – Construction of new homes
unexpectedly nosedived across the United States in December,
hitting its lowest level in more than two years, government data
showed Tuesday.
The Commerce Department data, which were delayed due to the
December-January government shutdown, coincided with a sharp drop
on Wall Street which economists say could have slowed investment
in some sectors.
Despite the slowdown in construction, the numbers in the data
on permits also pointed to a possible rebound in the construction
of apartments, a volatile category.
Total housing starts fell 11.2 percent to an annual rate of
1.08 million, seasonally adjusted, well below what economists had
been expecting and the lowest point since September of 2016,
according to the Commerce Department.
Starts for single-family homes fell for the fourth straight
month.
The number of construction permits issued — a sign of
construction in the pipeline — also rose higher than expected to
an annual rate of 1.33 million, driven by a sudden jump in
building permits for apartments.
Weakness in the housing sector last year prompted concerns
for US economic growth in the near term but analysts say demand is
expected to recover this year as mortgage prices fall.
The December numbers were also mostly within broad margins of
error and officials warn trends may take as much as six months to
appear.
Nevertheless, Ian Shepherdson of Pantheon Macroeconomics
wrote Tuesday the December numbers were “grim” but were unlikely
to deteriorate further.
Wall Street’s rout in December “clearly scared homebuilders,
so the rebound in the market this year ought to be followed by a
rebound in construction activity over the next couple of months.”
BSS/AFP/RY/20:50 hrs