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Housing starts slumped more than expected in November, pulling back from a nine-year high in the prior month according to the Department of Commerce.
Home groundbreakings fell by 18.7% at a seasonally adjusted annual rate of 1.09 million. The rate of starts in October was revised higher.
Economists had forecast that they dropped 7% at a rate of 1.23 million. Starts slowed the most – by more than half – in the Northeast and in buildings with five or more units.
Building permits for construction fell 4.7% at a rate of 1.2 million. They were expected to dip by 1.6% at a rate of 1.24 million, according to Bloomberg.
A report from the National Association of Homebuilders released Thursday showed that homebuilders’ confidence in market conditions surged to an 11-year high post-election. Their optimism was pegged on the belief that President-elect Donald Trump would ease regulatory burdens, which currently include zoning restrictions.
However, rising interest rates could impact the ease of access to credit. And, stricter immigration policies could reduce the supply of builders and increase wage inflation.