The housing market remained a bright spot in the US economy at the close of 2020 as home construction jumped again, according to government data Thursday.
Home sales were strong even before the pandemic struck early last year and have remained robust amid record low interest rates, while builders have struggled to keep up as prices have risen.
Homebuilding projects started last month jumped 5.8 percent compared to November, rising to a seasonally adjusted annual rate of 1.67 million units, the Commerce Department reported, far more than economists had expected.
While there is a high margin of error for the volatile data, the gains are notable: the rate of housing starts was 12 percent higher than December 2019.
For all of 2020, the report estimates over 1.38 million housing units were started, seven percent more than in 2019.
"The housing sector finished 2020 with solid momentum," said Nancy Vanden Houten of Oxford Economics, noting that housing starts accelerated in December "to their fastest pace in more than 14 years."
However, she said, "We expect the pace of housing starts to moderate in 2021 as homebuilders confront constraints including high lumber prices and shortages of lots and labor."
Construction begun on single-family homes in December jumped 12 percent compared to the prior month, and was a stunning 27.8 percent above the same month of 2019.
But building of apartments retreated after the spike in November, falling just over 15 percent to an annual rate of 312,000, seasonally adjusted. That was 40 percent below December 2019, the report said.
The Northeast was the only region to see a drop in home construction started, according to the data.