U.S. housing starts and permits fell in November, but remained at levels consistent with a gradually improving housing market.
Groundbreaking declined 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 pace of 1.045 million units.
Economists polled by Reuters had forecast starts rising to a rate of 1.04 million units from October’s previously reported pace of 1.01 million units.
Yields for U.S. Treasuries held at lower levels, while the dollar was little changed against a basket of currencies. U.S. stock futures were pointing to a lower open also as crude oil prices continued to drift lower. Housing continues to be 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.
The housing recovery also is being challenged by a very slow pace of household formation, as high unemployment among young adults is forcing many to either continue living at home with their parents or share quarters with friends or relatives.
Household formation is currently running at about 500,000 a year, far below the more than 1 million that would signal a strong housing market recovery.