WASHINGTON (1/21/16)--Despite a meager end to the year, homebuilders built homes at the fastest pace in eight years in 2015, according to the Commerce Department.
Over the course of the year, 1.11 million new houses were built, with housing starts rising 11% on a year-over-year basis. Housing permits also recorded their strongest year since the financial crisis, rising 12% to an estimated 1.18 million units (MarketWatch Jan. 20).
In December, housing starts dropped by 2.5% to an annual rate of 1.15 million, despite the Northeast posting a strong 24.4% gain.
Permits also receded, falling by 3.9% to an annual rate of 1.23 million in December.
“Residential construction ended 2015 with a whimper,” said Andres Carbacho-Burgos, Moody’s analyst (Economy.com Jan. 20). “The decline was balanced between single- and multifamily starts and took place in three of the four census regions, with only the Northeast showing any gain.”
Moving into 2016, several obstacles could suppress homebuilding, MarketWatch reported.
The Federal Reserve likely will hike interest rates several more times in 2016, which could push up mortgage rates. Furthermore, builders have encountered a dearth of skilled construction workers and difficulty in finding affordable properties on which to build, the site said.