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US home construction sees steep December correction

© AFP | The tight US housing market saw the pace of new home construction starts fall sharply in December, but the level of permits for building remained fairly steady

WASHINGTON (AFP) - 

Home building in the United States slowed sharply in December after the rebound from late-summer hurricanes and as cold weather blanketed much of the country, according to data released Thursday.

The slowdown affected all regions and was felt most keenly in the important single-family sector, which saw its biggest monthly decline in nearly three years, according to the Commerce Department's monthly report.

But the supply of housing in the pipeline held steady, as permits for new construction was virtually unchanged from November.

Analysts say the housing market is tight, with labor shortages and rising input costs holding construction down, driving up prices and making it hard for would-be buyers to find homes.

Housing starts fell 8.2 percent for the month to an annual rate of 1.2 million units, seasonally adjusted, the biggest drop since November 2016. The decline put December starts six percent below the same month a year earlier.

The result was far worse than analyst expected, as the consensus was for a decrease of only 1.5 percent.

Commerce Department officials warn, however, that home construction numbers for a single-month can be volatile and that it may take as much as six months to establish a trend.

And the construction permits issued held steady at an annual rate of 1.3 million units, marginally above an analyst consensus forecast.

Still, some of the declines were in the double digits: single-family housing starts fell nearly 12 percent from November to an annual rate of 836,000, the largest one-month decline since February 2015.

In the South, construction of single-family homes fell 16.6 percent, the biggest drop since June 2014, and in the wintery Northeast, starts fell a whopping 24.2 percent.

But the overall rate of new housing started was still higher than the summer when Hurricanes Irma and Harvey struck the southern United States in August and September.

© 2018 AFP