Financial News: U.S. Housing Starts Unexpectedly Extend Slump In November,

U.S. Housing Starts Unexpectedly Extend Slump In November, But Building Permits Surge

(RTTNews) - While the Commerce Department released a report on Wednesday unexpectedly showing a continued slump by housing starts in the U.S. in the month of November, the report also showed a much bigger than expected surge by building permits.

The Commerce Department said housing starts tumbled by 1.8 percent to an annual rate of 1.289 million in November after plunging by 3.2 percent to a revised rate of 1.312 million in October.

Economists had expected housing starts to jump by 2.2 percent to an annual rate of 1.340 million from the 1,311 million originally reported for the previous month.

Housing starts fell for the third straight month as a nosedive by multi-family starts more than offset a sharp increase by single-family starts.

The report said multi-family starts plummeted by 23.2 percent to an annual rate of 278,000, while single-family starts shot up by 6.4 percent to an annual rate of 1.011 million.

Meanwhile, the Commerce Department said building permits spiked by 6.1 percent to an annual rate of 1.505 million in November after falling by 0.4 percent to a revised rate of 1.419 million in October.

Building permits, an indicator of future housing demand, were expected to climb by 1.0 percent to a rate of 1.430 million from the 1.416 million originally reported for the previous month.

With multi-family permits skyrocketing by 19.0 percent to an annual rate of 533,000, building permits reached their highest level since February. Single-family permits crept up by 0.1 percent to a rate of 972,000.

"The paces of starts and permits are in line with the recent builder sentiment data, which indicated expectations for sales in the near term as still subdued but expectations for the next six months are substantially higher," said Nationwide Economist Daniel Vielhaber.

"These expectations are likely due to the prospect of mortgage rates falling in the first half of 2025," he added. "Still, we are likely a ways off from mortgage rates that will provide more than a moderate boost to housing market activity."

A separate report released by the National Association of Home Builders on Tuesday showed homebuilder confidence has held steady in the month of December.

The report said the NAHB/Wells Fargo Housing Market Index came in at 46 in December, unchanged from November. Economists had expected the index to inch up to 47.

With the unchanged reading, the housing market index remained at its highest level since reaching 51 in April.

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