By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — New construction of U.S. houses retreated in December, putting an end to a year in which builders broke ground on a record-low number of single-family homes, the Commerce Department estimated Thursday.
Housing starts fell 4.1% to an annualized rate of 679,000 last month, after a strong gain in November had put starts at their highest level since April 2010.
Economists surveyed by MarketWatch were expecting a stronger report, with starts forecast to rise to a 695,000 rate.
Starts of single-family homes rose 4.4% to a 470,000 rate in December, while starts of the more volatile multifamily sector dropped 20.4% to 187,000.
Building permits, a sign of future construction, fell 0.1% in December to a seasonally adjusted annual rate of 679,000.
Building permits for single-family homes rose 1.8% to a 444,000 rate last month. Many economists consider single-family permits to be the most important number in the government’s release.
The overall home-construction market did improve a bit in 2011.
Housing starts rose 3.4% to an annual pace of 606,900, up from 586,900 in 2010.
But starts of single-family homes fell 9% to a record low 428,600 units.
Some economists think 2012 could be the year that housing turns the corner. Mortgage rates are low, homes are more affordable and inventories are down a bit, they note,
Economists at Capital Economics estimate that, with about 4 million homes in the foreclosure pipeline, it will be a few more years before starts return to a more normal pace of 1 million per-year.
In a separate report, the Labor Department reported that initial jobless claims fell 50,000 to 352,000, the lowest level since April 2008.
