Drop in December US housing starts smaller than expected

[WASHINGTON] The pace of US home construction dropped less than forecast in December, capping the best year for the industry since 2007.

Housing starts fell 9.8 per cent to a 999,000 annualised rate following November's revised 1.11 million pace, which was the highest since November 2007, the Commerce Department reported. The median estimate of 83 economists surveyed by Bloomberg was 985,000. Permits for future projects declined, a sign that activity may pause in early 2014.

Housing remains a mainstay of the expansion, with builders breaking ground on more projects as an improved job market boosts demand for real estate. At the same time, bigger gains in employment and incomes will be needed to overcome the decline in affordability as property values and mortgage rates rise.