U.S. housing starts hit 6-1/2 years high in December
(Reuters) – Groundbreaking for U.S. single-family homes raced to the highest level in more than 6-1/2 years in December and permits surged, in a hopeful sign for the sluggish housing market recovery.
Housing has lagged an acceleration in economic growth, but Wednesday’s report hinted at a pick-up in activity. That should help to further strengthen the U.S. economy’s fundamentals as it confronts headwinds from slowing global growth.
“The last piece of the economic puzzle is starting to come together now as housing construction is coming back. The housing market is continuing to heal,” said Chris Rupkey, chief financial economist at MUFG Union Bank in New York.
The Commerce Department said on Wednesday that single-family housing starts, the largest part of the market, jumped 7.2 percent to a seasonally adjusted annual pace of 728,000-units – the highest level since March 2008.
That offset a 0.8 percent fall in groundbreaking for the volatile multi-family homes segment, lifting overall housing starts 4.4 percent to a 1.09 million-unit rate last month. Wall Street had forecast starts rising to a 1.04 million-unit pace.
Homebuilder shares were trading higher on the data, helping the housing index to outperform the broader U.S. stock market. DR Horton, the largest homebuilder, rose 0.65 percent, while Lennar Corp gained 1.03 percent and Pulte Group was up 0.19 percent.