US home building falls as developers start fewer apartments
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WASHINGTON — U.S. builders broke ground on fewer homes last month, led by a drop in apartment construction.
The number of new housing starts declined 2.6
Even with the decline, new home construction has increased 10.5
Many potential buyers are frustrated by a lack of available properties. The supply of existing homes fell in December to its lowest level since 1999. That has pushed up prices as buyers have had to bid against each other.
Home builders have responded by ramping up construction, but the increases haven't been fast enough to relieve supply shortages.
In a positive sign, building permits, a gauge of future construction, rose 4.6
"The big uptick in permits should be good news for inventory-constrained homebuyers, as permits eventually become starts, which in turn become new homes for sale," Ralph McLaughlin, chief economist for real estate data provider Trulia. "As a result, we shouldn't be surprised to see a strong uptick in starts in mid-2017."
Rising prices, a tight supply of homes and higher mortgage rates combined to slow sales of existing homes in December, when they fell 2.8
Still, home construction has largely recovered from the housing bust that began a decade ago. In 2016, builders started work on the most new homes since 2007, the year the Great Recession began.
Home building increased the most last month in the Northeast, where housing starts soared 55.4
Higher mortgage rates could exert a bigger drag on sales in the coming months. The average fixed-rate 30-year mortgage eased to 4.15
While that is still low historically, it is far above the average rate of 3.65