Housing starts rose in December, supported by a rebound in multifamily construction.
Data from Census Bureau It showed that housing jumped 15.8% in December to an annual rate of 1.49 million, higher than economists’ expectations for an annual rate of 1.32 million.
Single-family beginnings have made modest progress. Construction rose 3.3% to an annual rate of 1.05 million, the strongest pace since February 2024. Meanwhile, multifamily housing construction grew about 62%.
“Housing starts rose at the end of the year, but that does not mean the country is out of the woods when it comes to problems in the residential housing sector,” Christopher Rupke, chief economist at FWDBONDS, wrote after the release.
“There is still a housing shortage in the country, and residential home construction remains historically low,” the economist added.
To this point, new construction in 2024 has been the slowest since 2019, per Bloomberg. Despite the high rates, builders are dealing with high rates on mortgages. Mortgage interest rates rose to 7.04% this week, hitting their highest levels since May 2024, Freddie Mac said. Home loan interest rates tend to follow U.S. Treasury yields, which have been rising after strong employment data.