Housing starts best in years

Ruth Mantell / MarketWatch /

WASHINGTON — Construction on new U.S. homes jumped in December to the highest rate in more than four years, with gains across the country, as well as in single-family homes and buildings, the U.S. Department of Commerce reported Thursday.

In the freshest data signaling a strengthening housing market, starts rose 12.1 percent in December to a seasonally adjusted annual rate of 954,000 — the highest level since June 2008.

“Overall, this report reinforces the current narrative of a positive growth momentum in the housing sector,” said Millan Mulraine, a macro strategist at TD Securities.

Economists polled by MarketWatch had expected U.S. housing starts to increase to a rate of 883,000 from an original estimate of 861,000 for November, on factors such as rising building permits and confidence among home builders, as well as relatively mild weather for the season.

On Thursday, the government revised November’s rate to 851,000.

Starts rose 24.7 percent in the Midwest, 21.4 percent in the Northeast, 18.7 percent in the West and 3.8 percent in the South.

While starts in December were up 37 percent from a year earlier, rates remain far below a bubble peak of almost 2.3 million in 2006.

Meanwhile, building permits, a sign of future demand, rose 0.3 percent in December to a rate of 903,000 — the highest rate since July 2008. Permits for single-family homes rose 1.8 percent to a rate of 578,000, while permits for structures with at least two units declined 2.1 percent to a rate of 325,000. The lower growth in permits means that starts could slow down in coming months.

For all of 2012, the government estimated that there were 780,000 housing starts, the highest level since 2008 and up 28 percent from 2011.

Meanwhile, permits rose 30 percent to 813,000 in 2012, also the highest level since 2008. Housing completions rose 11 percent to 651,000 in 2012, the highest level since 2010.

An improving trend for housing starts echoes other recent housing data. Confidence among homebuilders is holding at a more-than-six-year peak, with more markets showing signs of recovery.