By Xavier Fontdegloria

 

Construction of new homes in the U.S. increased in December, extending the sharp rise registered the previous month, data from the Commerce Department showed Wednesday. Here are the main takeaways from the report:

--Housing starts, a measure of U.S. homebuilding, rose 1.4% in December on month, to a seasonally adjusted annual rate of 1.702 million, the highest level since March. The reading is above the consensus forecast from The Wall Street Journal poll of economists, who expected starts to decline 1.7% to an annual pace of 1.65 million.

--Housing starts are 2.5% above the same month a year earlier.

--In November, housing starts were slightly revised to 1.678 million from an earlier estimate of 1.679 million.

--Monthly housing starts data are volatile and often revised. December's data came with a margin of error of 10.1 percentage points.

--Residential permits, which can be a bellwether for future home construction, increased 9.1% in December on month, to a seasonally adjusted annual rate of 1.873 million. The figure beats economists' forecasts of a 0.1% drop to an annual pace of 1.71 million.

--U.S. housing starts report for December compares with January's indicator compiled by the National Association of Home Builders, which showed confidence in the single-family housing market waning slightly but still at robust levels.

--Housing demand remains solid but construction of homes has been hampered by material and labor shortages, which have led to increasing costs and extended project deadlines.

 

Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com

 

(END) Dow Jones Newswires

January 19, 2022 09:06 ET (14:06 GMT)

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