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US housing starts tumble from nine-year high

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US homebuilding fell more than expected in November, tumbling from a nine-year high as construction activity declined broadly.

[WASHINGTON] US homebuilding fell more than expected in November, tumbling from a nine-year high as construction activity declined broadly.

Groundbreaking on new housing projects dropped 18.7 per cent to a seasonally adjusted annual rate of 1.09 million units, the Commerce Department said on Friday. October's starts were revised up to a 1.34 million-unit rate, the highest since July 2007.

Economists polled by Reuters had forecast housing starts slipping to a 1.23 million-unit rate in November from the previously reported 1.32 million pace. Starts fell in all four regions last month. Housing starts data is very volatile month-to-month.

October's surge in home building had widened the gap between permits and starts. As such, a drop in housing starts was widely anticipated to bring them more in line with permits.

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The housing market remains on solid ground even as mortgage rates have jumped to more than two-year highs following the election of Donald Trump as the next president. A survey on Thursday showed homebuilders' confidence in December hitting its highest level since July 2005, with builders anticipating strong sales.

Last month, single-family home building, which accounts for the largest share of the residential housing market, fell 4.1 per cent to an 828,000-unit pace. Single-family starts rose to nine-year high in October.

The housing market is being supported by a tightening labour market, which is starting to drive up wages.

Housing starts for the volatile multi-family segment tumbled 45.1 per cent to a 262,000-unit pace.

Permits for future construction fell 4.7 per cent in November. Single-family permits rose 0.5 per cent last month, while building permits for multi-family units dropped 13.0 per cent.

REUTERS

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