Housing starts take a December dip with cold weather
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Brutish winter weather drove national data on new housing starts down in December, but the South and the West fared better than the chillier Midwest and Northeast.
December starts were at a seasonally adjusted annual rate of 557,000, a 4% decline from a revised November estimate of 580,000, the government said this morning. The figure was 0.2% above the December 2008 rate of 556,000.
But another key indicator in the government data showed some signs of improvement for the construction industry. The number of housing permits -- which are less susceptible to weather changes and have a lower margin of error -- increased 10.9% to 653,000 from the revised November rate of 589,000 and is 15.8% above the December 2008 estimate of 564,000.
The number of single-family homes authorized in December was up 8.3%, at 508,000.
Commerce Secretary Gary Locke said this morning he was optimistic about the report and the outlook for housing in 2010, given low interest rates and a home-buying tax credit offered to first-time purchasers and certain homeowners through April.
“Despite the mixed performance at year end, conditions remain favorable for growth in the coming months,” he said in a statement. “Mortgage rates remain relatively low and the expanded home-buyers’ tax credit provides buyers with attractive opportunities in the coming months.”
December starts in the West declined 0.9% from November to a seasonally adjusted annual rate of 108,000 units. The South fared the best, up 3.3%, while the chilly Northeast dropped 19% and the Midwest declined 18%.
“Will weather pull the numbers back up in January? So far, with unusually cold weather in the South, and rain in California, the answer appears to be no,” Patrick Newport, U.S. economist at IHS Global Insight, wrote in a note to clients this morning. “A bounce-back in February, though, is likely.”
-- Alejandro Lazo