US single-family housing starts rebound in January, building permits decline

(Corrects to show starts increased ‌in November ​instead of ​fell)

WASHINGTON, Feb 18 (Reuters) - U.S. single-family homebuilding rebounded in December, but a decline in permits for future construction pointed to underlying weakness ‌amid higher mortgage rates and material costs.

Single-family housing starts, which ⁠account for the bulk of homebuilding, rose 4.1% to a seasonally adjusted annual rate of ‌981,000 units in December, the ‌Commerce Department's Census Bureau said on Wednesday. Starts increased to a pace of 942,000 units in November from a 894,000-unit pace in October.

The reports ​were delayed by last year's shutdown of the federal government. Tariffs on imported goods, including lumber and vanity cabinets, have raised the prices of ⁠materials, while worker shortages amid an immigration crackdown are contributing to higher building costs, constraining activity.

Permits for ​future single-family homebuilding slipped 1.7% to a rate of 881,000 units in December. They rose to a pace of 896,000 ​units in November from a 878,000-unit rate in ‌October.

Homebuilder sentiment deteriorated further in February, a survey from the National Association of Home Builders showed on Tuesday, with ⁠builders citing persistently high land and construction costs as well as still-elevated house prices relative to incomes among constraints.

The Trump administration has implemented a raft of measures, including ⁠purchases of mortgage-backed securities and banning institutional investors from buying single-family homes, to improve housing ​affordability. Though mortgage rates have eased, progress has stalled as worries over federal government debt have kept U.S. Treasury yields elevated.

Mortgage rates track the 10-year Treasury yield. Economists and ‌realtors say more supply is needed to make housing more affordable. The government's delayed advance estimate of fourth-quarter gross ‌domestic product on Friday is expected to show residential investment contracted for a fourth ⁠straight quarter.

The economy is forecast ‌to have grown at ​a 3.0% annualized rate last quarter after expanding at a 4.4% pace in the July-September quarter.

(Reporting by Lucia Mutikani; Editing by ‌Chizu Nomiyama)

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