U.S. housing starts fall, but trend points to recovery
By Lucia Mutikani
WASHINGTON (Reuters) - U.S. housing starts fell in November as groundbreaking for single-family homes declined after two hefty increases, in what appeared to be a brief pause in a gradual recovery trend.
Starts dropped 1.6 percent to a seasonally adjusted annual pace of 1.028 million units, the Commerce Department said on Tuesday. October's starts were revised up to a 1.045 million-unit pace.
Despite November's fall, groundbreaking is up 7.7 percent compared to the first 11 months of 2013. Starts have averaged a 990,000-unit pace so far this year, up from an average 930,000-unit rate last year.
"It is hard to complain about the housing sector," said Joel Naroff, chief economist at Naroff Economic Advisors in Holland Pennsylvania. "The U.S. economy is on an accelerating growth path that should continue for quite some time. We don't need a robust housing market to drive growth."
Wall Street had forecast starts rising at a pace of 1.04 million units from October's previously reported pace of 1.01 million units.
In a separate report, financial data firm Markit said its preliminary or "flash" U.S. Manufacturing Purchasing Managers Index fell to 53.7 in December, the lowest reading in 11 months, from 54.8 in November.
While the survey hints at slowing factory activity, so-called hard data such as industrial production have painted a bullish picture of the manufacturing sector and showed little sign that a sputtering global economy and crude oil price rout were having an impact on American factories.
U.S. stocks were up sharply in volatile trading and prices for U.S. Treasury debt rose. The dollar fell against a basket of currencies. Housing is being stymied by tepid wage growth, which has been far outpaced by home price increases. Higher mortgage rates are also a constraint, although they have declined from a peak reached in September 2013. Continued...