U.S. December Housing Data Reflects Mixed Signals for Construction Sector

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Housing Starts Significantly Exceed Projections

Housing starts surged in December to a seasonally adjusted annual rate of 1.499 million, beating the pre-report estimate of 1.33 million. This represents a robust 15.8% increase from November’s revised figure of 1.294 million, although it remains 4.4% lower year-over-year compared to December 2023’s 1.568 million.

Single-family starts showed modest growth at 1.05 million, rising 3.3% month-over-month, while multifamily starts came in at 418,000. For the entirety of 2024, housing starts totaled 1.364 million, a 3.9% decline from 2023.

Housing Completions Decline Month-over-Month

Housing completions in December dropped to an annual rate of 1.544 million, down 4.8% from November’s revised estimate of 1.621 million. This figure is also 0.8% lower year-over-year compared to December 2023’s 1.557 million.

Single-family completions fell 7.4% month-over-month, totaling 948,000, while multifamily completions were recorded at 570,000. Despite the monthly slowdown, annual completions for 2024 were 1.627 million, representing a 12.3% increase from 2023 as builders cleared backlogs.

Market Implications and Forecast

The December housing data presents a mixed outlook for traders. While building permits and housing starts beat expectations, the decline in housing completions—especially single-family units—signals potential bottlenecks in the construction process.

Short-term prospects remain cautiously bullish, with robust housing starts suggesting optimism among builders, while single-family permits indicate ongoing demand. Traders should watch for further clarity in January’s data to confirm sustained momentum in the residential construction sector.



This article was originally published by a www.fxempire.com

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