U.S. new-home construction unexpectedly fell in November to a four-month low, the Commerce Department reported on Wednesday, with a rebound in starts of single-family dwellings offset by a drop in multifamily projects. Housing starts decreased 1.8% to an annualized rate of 1.289m, the lowest since July. Economists polled by Reuters had forecast that they would increase to a rate of 1.343m units. Starts of single-family homes rose 6.4% to an annualized rate of 1.01m while new construction of multifamily projects decreased 24.1% to 264,000. Permits for future construction of single-family housing rose 0.1% to a rate of 972,000 units. Multi-family building permits soared 22.1% to a rate of 481,000 units. The inventory of single-family housing under construction decreased 0.8% to a rate of 637,000 units, the lowest level since March 2021. “It is clear that there is a lot of pent-up demand in the housing market, and more single-family inventory is needed to meet that demand,” commented Lisa Sturtevant, chief economist at Bright MLS. “The challenge for home builders is not on the demand side. Supply-side factors, including rising costs of materials and labor, along with almost-limited land for development, will be the primary constraints on homebuilders in the year ahead.”
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