New residential construction fell less than expected in December, capping a year of resurgent construction activity.
Housing starts dropped 9.8% from a multiyear high in November to a seasonally adjusted annual rate of 999,000, the Commerce Department said Friday. A rebounding housing market in 2013 pushed starts for the entire year 18.3% higher than 2012.
Analysts polled by Bloomberg News had forecast December starts to fall to a 985,000 rate. November’s strong numbers were also revised upward, from 1.09 million to 1.11 million.
Building permits, a gauge of future construction, dropped 3% from November. Home building increased in 2013, although the annual 923,400-start estimate is still below historic levels.
“Construction remains the laggard of the recovery,” Trulia chief economist Jed Kolko said in a statement. “Slow household formation and elevated vacancy rates explain why construction remains far below normal.”
The new construction data come one day after the National Assn. of Home Builders said builder confidence slipped slightly in January, although optimism remained high to start the year.
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