New US housing starts unexpectedly fell in December, pulled down by a drop in construction activity for single-family dwellings, a government report showed today.
The Commerce Department said housing starts fell 4% to a seasonally adjusted annual rate of 557,000 units. Analysts had expected housing starts to rise to 580,000 units.
November's housing starts were revised upwards to 580,000 units from the previously reported 574,000 units. The drop in housing starts was likely the result of unusually cold weather last month.
Groundbreaking activity dropped a record 38.8% to an all-time low of 553,000 units for the whole of 2009.
Starts for single-family homes fell 6.9% last month to an annual rate of 456,000 units after rising 4% in November. Groundbreaking for the volatile multi-family segment rose 12.2% to a 101,000 unit annual pace, after surging 69.8% in November.
The US housing industry is on the mend after a three-year slump and new home construction contributed to economic growth in the third quarter of 2009 for the first time since 2005.
However, data such as pending home sales and homebuilder sentiment have hinted at potential weakness in a sector whose collapse triggered the most brutal US recession since the Great Depression of the 1930s.
New building permits, which give a sense of future home construction, rose 10.9% to 653,000 units last month, the highest since October 2008. That compared to analysts' forecasts for 590,000 units. For the whole of 2009, permits dropped 36.9%, the department said.
The inventory of total houses under construction dropped 3.8% to a record low of 511,000 units last month, while the total number of permits authorised but not yet started rose 8.4% to 95,800 units.
A separate report from the Labor Department showed producer prices - prices before they reach consumers - rose 0.2% last month as food prices surged.
