US housing starts fall 0.5% in November as Fed hikes bite

By Ovunc Kutlu

ISTANBUL (AA) - US housing starts showed a decline of 0.5% in November on a monthly basis, as the Federal Reserve's aggressive rate hikes increased borrowing costs and lowered demand in the American housing sector.

Housing starts, which measures the change in the number of new residential buildings beginning construction, stood at 1.427 million in November.

The figure is a slight decrease from the revised October estimate of 1.434 million, while it is down 16.4% from the November 2021 figure of 1.706 million annually.

Building permits, a key indicator of demand in the market, also fell 11.2% to 1.342 million in November, according to data released on Tuesday by the Census Bureau and the Department of Housing and Urban Development.

The October figure for building permits was revised to 1.512 million.

Annually, building permits saw a massive 22.4% decline from 1.729 million in November 2021.

While the Fed is expected to continue rate hikes in the first quarter of 2023, the possibility of a recession in the American economy next year also keeps demand low in the housing industry.