Sandy Slows November Home Builds

New home construction struggled in the Northeast following Superstorm Sandy's impact in November; housing starts dipped following October's four-year high. Starts and building permits are both near 2008 levels, better than the lows reached the following year, but far from healthy.

Homebuilders broke ground on fewer houses in November after starting work in October at the fastest pace in four years. A decline was expected, however, as the effects of Superstorm Sandy came into focus in the Northeast.

Builders began construction on new homes at a seasonally adjusted annual rate of 861,000. That was 3 percent less than October's annual rate of 888,000, which was the fastest since July 2008, according to a report from the Census Bureau. Housing starts fell 5.2 percent in the Northeast in November compared with October. Compared with a year earlier, starts are down nearly 26 percent in the Northeast, the only region to record a drop in the past year.

The trend line for the homebuilding market remains positive, as it has for most of 2012. Housing starts were 21.6 percent higher in November than they were 12 months earlier, and permits rose to 899,000, the most since July 2008.

Housing starts are far above the annual rate of 478,000 touched in April 2009, the recession low. However, levels remain well short of the 1.5 million annual rate that market analysts consider healthy.