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Condos Lead Housing Sales, Starts

Single-family Home Starts, Permits Lag Behind

Helped by warmer weather and lower asking prices for homes, housing starts jumped up by 4.5% in December, but the gain was all in condominium and apartment construction while the key market for single-family homes fell off by 4.1%, the Commerce Department reported.

Accounting for all of the month's gain, the nation's housing developers continued to break ground at a hectic pace for multi-family housing, with starts for buildings of five or more units racing ahead by 30.6% to a seasonally adjusted level of 350,000, up from 268,000 in November. It marked the single biggest monthly gain in the apartment and condominium market since January 2006, when starts hit a 13-month high of 424,000.

But builders continued to hedge their bets on the bigger market for single-family homes, and starts there fell by 4.1% to a seasonally adjusted level of 1.2 million units as developers worked to rein in inventories as prices tapered off.

Single-family starts are now off more than 32% from a 13-month high of 1.8 million units in January 2006.

In a sign that builders are growing more bullish, developers took out building permits at an accelerated rate in December, the pace increasing by 5.5%, to 1.6 million units. Single-family home permits edged up by 1.2%, but were sharply outpaced by permits for apartments and condominiums, which shot up by 19.0%, but remained 7.1% beneath their year-ago level.

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