Housing starts extended their wild ride of volatility in December, up 11.3 percent in the month to a 1.226 million annualized rate which beats the Econoday consensus for 1.200 million. But the rise is confined to multi-unit starts which jumped 57 percent to a 431,000 rate, a contrast to the 4.0 percent decline to 795,000 for single-family starts.
Permits, which are subject to less volatility than starts, slipped 0.2 percent in December to a 1.210 million rate which is sizably below expectations for 1.230 million. Here, however, the details favor single-family homes where permits rose 4.7 percent to 817,000 vs a sharp 9.0 percent decline on the multi-unit side to 393,000.
Single-family homes, which pack the most cost and price punch, are the focus of the housing market and today's results are mixed, with permits a positive but starts a tangible negative. In sum, lack of available supply remains an obstacle to sales acceleration for housing.
Housing starts are in a swirl of month-to-month volatility, falling 19 percent, surging 27 percent, and falling 10 percent in the last three months. A bounce back for December is expected, to a 1.200 million annualized rate and a 10.1 percent gain from November. Housing permits have been less volatile and are expected to rise 2.4 percent to a 1.230 million rate. Year-on-year, starts and permits have been weak, in the negative mid-single digits.