Washington, DC, January 19, 2006—Housing starts fell 8.3% to a seasonally adjusted annual rate of 1.933 million, the lowest level since March, the Commerce Department estimated Thursday.
Economists expected December housing starts would fall to a 2.04 million pace from 2.121 million in November.
Building permits - a sign of future activity - dropped 4.4% to an annual rate of 2.068 million in December from 2.163 million in November.
For all of 2005, housing starts rose 5.6% to 2.065 million, the most since the record 2.356 million in 1972. Building permits increased 3.4% to 2.141 million in 2005.
Starts of single-family homes rose 6.4% in 2005 to a record 1.714 million.
Markets and policymakers have been watching the housing data carefully for signs of a collapse after years of robust construction and sales. But Commerce Department officials caution that the monthly construction data are extremely volatile and are subject to large sampling errors.
The data are particularly volatile in winter months, when weather can have a big impact on new construction.
It can take six months to establish a trend in starts. In the past six months, starts have averaged 2.068 million annualized, down from 2.09 million last month.
In December, starts of single-family homes plunged 12.3% to a seasonally adjusted annual rate of 1.577 million from 1.798 million in November.
Building permits for single-family homes fell 5% to 1.637 million in December from 1.724 million in November
