Washington (AFP) – New construction of US homes surged in December compared to November, when the rate was revised up, closing a strong year for the housing market, the Commerce Department reported Thursday.
The gain erased the drop in November and was entirely driven by a stunning 54 percent jump in multi-unit buildings, like apartments and condos, which overwhelmed the four percent drop in single-family home construction.
Total housing starts jumped 11 percent to an annual rate of 1.226 million units, seasonally adjusted, from November’s 1.102 million. This outpaced analysts expectations for an increase to 1.193 million units.
As winter set in, the number of single-family homes started fell to 795,000 units, while buildings of five units or more surged to 417,000 from 271,000 in the prior month.
There were 1.166 million units started in 2016, 4.9 percent more than in 2015.
Building permits were essentially flat in December, slipping 0.2 percent to a 1.21 million annual rate, in line with expectations. Permits were up 0.4 percent for the full year, with 1.187 million units authorized.
The data, while sometimes volatile, is watched closely as housing is a key part of the US economy, and has trickle-down effects to other sectors since new homeowners typically buy appliances, furniture and other goods.