December Housing Starts Up 4.4%, Builders Get Small Boost

U.S. housing starts grew 4.4 percent in December, giving a modest boost to homebuilders' shares in the face of recently narrowing profit margins.

The U.S. Commerce Department said Wednesday that housing starts grew to a 1.09 million annual rate last month, up from November's adjusted rate of 1.04 million units.

December's rate was nearly 5 percent higher than Wall Street's expectation of 1.04 units.

Housing construction stocks showed small gains Wednesday after falling earlier in the week on worries about a squeeze on margins related to rising land costs, plus weakening prospects in Texas where many national builders face significant exposure.

The exchange-traded fund SPDR S&P Homebuilders XHB changed hands recently at $33.38, up 0.88 percent. The fund is off about 5 percent during the past week.

Single-family housing starts rose 7.2 percent in December from November, while construction starts on buildings with five units or more fell 4.2 percent.

About 1 million housing units were started in 2014. This is 8.8 percent above the 2013 figure of 924,900 and the best year for the business since 2007.

Building permits fell nearly 2 percent from November to a seasonally adjusted annual rate of about 1.03 million units. The figure is about 1 percent higher than December 2013.