New-home construction in the US unexpectedly fell in December, indicating the industry lost some momentum entering 2016.
Residential starts declined 2.5% to a 1.15 million annualized rate, from the prior month's revised 1.18 million pace, a Commerce Department report showed Wednesday. The median forecast in a Bloomberg survey called for an increase to 1.2 million. Permits, a proxy for future construction, also fell on a decline in applications for multifamily projects.
Housing demand would benefit from faster wage growth and more broad-based access to credit, allowing more Americans to take advantage of low mortgage rates. The report showed a pick-up last month in applications to build single-family homes, indicating construction will gradually advance in coming months.
"It's a matter of a giveback after an unsustainable pace of gains, rather than any germane deterioration," Millan Mulraine, deputy head of US research and strategy at TD Securities LLC in New York, said before the report.
"While the housing recovery remains on track, there hasn't been the kind of momentum that was expected. It's going to be a slow grind higher." For all of 2015, housing starts climbed 10.8% to 1.11 million, the strongest year for construction since 2007.
Estimates for December starts ranged from 1.11 million to 1.3 million. The previous month was revised from a 1.17 million pace.
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Residential starts declined 2.5% to a 1.15 million annualized rate, from the prior month's revised 1.18 million pace, a Commerce Department report showed Wednesday. The median forecast in a Bloomberg survey called for an increase to 1.2 million. Permits, a proxy for future construction, also fell on a decline in applications for multifamily projects.
Housing demand would benefit from faster wage growth and more broad-based access to credit, allowing more Americans to take advantage of low mortgage rates. The report showed a pick-up last month in applications to build single-family homes, indicating construction will gradually advance in coming months.
"It's a matter of a giveback after an unsustainable pace of gains, rather than any germane deterioration," Millan Mulraine, deputy head of US research and strategy at TD Securities LLC in New York, said before the report.
"While the housing recovery remains on track, there hasn't been the kind of momentum that was expected. It's going to be a slow grind higher." For all of 2015, housing starts climbed 10.8% to 1.11 million, the strongest year for construction since 2007.
Estimates for December starts ranged from 1.11 million to 1.3 million. The previous month was revised from a 1.17 million pace.
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