U.S. single-family homebuilding rebounded in December, but the increase was likely temporary as permits for future construction continued to decline amid higher mortgage rates.
Single-family housing starts, which account for the bulk of homebuilding, increased 11.3% to a seasonally adjusted annual rate of 909,000 units last month, the highest level since August, the Commerce Department reported on Thursday.
Starts for housing projects with five units or more tumbled 18.9% to a rate of 463,000 units. Overall housing starts decreased 1.4% to a rate of 1.382 million units last month. Housing starts fell 3.0% in 2022.
Economists polled by Reuters had forecast starts would slide to a rate of 1.359 million units in December.
Single-family building permits declined 6.5% to a rate of 730,000 units, while those for housing projects with five units or more increased 7.1% to a rate of 555,000 units. Overall building permits fell 1.6% to a rate of 1.330 million units. Permits dropped 5.0% in 2022.