Driven by a drop in single-family construction, U.S. housing starts plunged in December, marking the biggest decline in new residential construction in a little over a year, according to U.S. Census Bureau statistics released Thursday.

In a reversal from November, when the construction industry tallied a 10-year high with a revised seasonally adjusted rate of 948,000 new single-family units, the single-family rate for December dropped 11.8 percent, to 836,000, according to newly revised Census Bureau numbers.

Overall, U.S. housing starts in December fell 8.2 percent, to 1.19 million units, a far cry from November, when the construction industry broke ground on 1.3. million units. New construction fell 6 percent below the December 2016 rate of 1.27 million, according to the Census Bureau.

Housing experts, however, emphasized that the overall pace of U.S. housing starts in 2017 averaged at 1.2 million units, up 2.4 percent above the 2016 rate of 1.17 million units.

“The latest decline in the volatile housing starts data is disappointing, but surely not lasting,” said Lawrence Yun, chief economist with the National Association of Realtors, in a prepared statement. “New home construction still closed out 2017 as expected, with 1.2 million units —  the best since 2007. Given that the sales for both new and existing homes sold briskly through last year and at notably higher prices, housing starts should easily surpass 1.3 million in 2018.”

Nela Richardson, chief economist at Redfin, warned that the annual 2017 rate of 1.2 million units fell significantly below historical averages. Experts have attributed the historically low inventory to high land prices and a costlier workforce as undocumented immigration declines.

“The pace of housing starts averaged just 1.2 million for the year, far short of the historical average of 1.5 million starts,” Richardson said in a statement. “Given the three-year drought in inventory and surging homebuyer demand, a pace of 2 to 3 million starts would be reasonable and appropriate.”

Building permits in December, meanwhile, dropped to 1.302 million, a 0.1 percent decline from November, when the number of permits filed overall stood at 1.303 million. Permits for single-family homes rose 1.8 percent, to 881,000 from a month earlier, according to Census numbers.

Email Jotham Sederstrom

Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
Success!
Thank you for subscribing to Morning Headlines.
Back to top
×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription