Single-family housing starts fell 7% in an unusually cold December from the prior month as construction activity ended the year at levels last seen in the summer of 2008.
Analysts at JPMorgan Chase Bank were expecting a drop-off in December after starts surged 16% in November when builders rushed to put foundations in the group before winter set in. Surprisingly, the largest drop occurred in the West where housing starts fell 19% from November.
The Census Bureau reported Friday morning that single-family starts fell to a 667,000 seasonally adjusted annual rate in December from a 717,000 rate in November. The November rate was revised downward by 10,000 units.
At year-end, single-family starts are up 15% from 2012, according to the Census Bureau.
Meanwhile, multifamily starts fell 18% to a 312,000 seasonally adjusted annual rate in December from a 380,000 rate in November. Multifamily starts are up 25% year-over-year.
Economists at IHS Global Insight pointed out that builders started 923,400 homes and apartments in 2013. “They completed only 762,000 homes—the fifth lowest on record (data started in 1968), and not even half of what we judge to be normal,” says economists Patrick Newport and Stephan Karol.