Washington DC, December 16--Housing starts in November dropped unexpectedly by 13.1 percent for the category’s biggest decline in nearly 11 years, according to a Commerce Department report.
Housing starts during the month were off to a seasonally adjusted annual rate of 1.771 million units from an upwardly revised 2.039 million clip in October.
Economists were expecting starts to ease, but only to a level of 1.980 million unit from the 2.027 million rate initially reported for October.
Low mortgage lending rates, which averaged around 5.7 percent in November, had been supporting the housing sector despite five short-term interest-rate rises from the Federal Reserve this year.
Building permits were off 1.5 percent to a 1.988 million unit pace. Analysts had looked for a 2.000 million permit-issuing rate.
On a regional basis, starts fell 14.2 percent in the Northeast, 19.4 percent in the Midwest, 13.2 percent in the West and 10.4 percent in the South.
