By JOSH BOAK
AP Economics Writer
WASHINGTON (AP) — Groundbreakings on new homes fell 8.2 percent in December, and builders ended 2017 by slowing down their construction of single-family houses.
The Commerce Department said Thursday that the monthly decline put U.S. housing starts at a seasonally adjusted annual rate of 1.19 million units. Almost all of the decrease came from builders beginning work on fewer single-family houses, a reversal from the strong gains reported in October and November.
The pullback is taking place even as prospective buyers compete for a shrinking pool of homes for sale, which has caused prices to surge faster than wage growth. The hot housing market is being fueled by a strengthening job market. The unemployment rate is holding steady at a 17 year-low of 4.1 percent, and mortgage rates have hovered at attractive levels in recent weeks.
For all of 2017, housing starts have risen 2.4 percent. Single-family house construction drove the entire annual increase, and the construction of apartment complexes plunged last year as more renters appeared to be seeking properties to buy. The slight gains in construction have been unable to fully offset the big fall over the past year in the number of existing homes put up for sale.
Housing starts in December fell in the Northeast, Midwest, South and West.
Building permits, an indicator of future construction, slipped 0.1 percent in December to 1.3 million.