US housing starts fell a fourth month in December, and figures for the prior two months were revised lower, according to data released on Thursday.

The numbers offered yet another tepid read on a market that suffered mightily in 2022 amid unrelenting pressure from the Fed, housing’s erstwhile bubble accomplice.

Experts of various sorts expected starts to run at a 1.4 million annualized rate last month. The reported pace was 1.382 million.

Overall, the pace in December was close to the weakest of the pandemic era.

December’s decline in starts was down to multi-family units. Single-family starts rose for the first time in four months.

On Wednesday, the NAHB said builder sentiment moved up this month for the first time since 2021. Sentiment dropped every month last year thanks to persistent cost pressures and demand worries tied to higher mortgage rates for buyers. The NAHB gauge is closely correlated to single-family housing starts.

“It appears the low point for builder sentiment in this cycle was registered in December, even as many builders continue to use a variety of incentives, including price reductions, to bolster sales,” NAHB Chairman Jerry Konter said.

Mortgage rates are well off the highs, but still look onerous to younger buyers who simply aren’t old enough to remember periods when financing costs weren’t negligible.

The 11% increase in single-family starts (to a 909,000 annual rate) was the largest in more than a year.

The YoY decline narrowed from November’s 33% plunge, but not by much.

“The rise in builder sentiment means that cycle lows for permits and starts are likely near, and a rebound for home building could be underway later in 2023,” the NAHB’s Konter went on to say.

That can’t come fast enough. Part of the problem in housing is a dearth of supply, and although the days of frenzied bidding wars for every listing ended last spring, affordability remains a key impediment and that’s worsened by a lack of available properties.

For the full year, the Commerce Department estimated that 1.008 million single-family homes were started.

That was down almost 11% from 2021, and marked the largest decline since the housing bust more than a decade ago.

December’s data also showed permits missed expectations last month, falling to the slowest pace since May of 2020.

“In the coming quarters, single-family home building will rise off of cycle lows as mortgage rates are expected to trend lower and boost housing affordability, increas[ing] demand as the nation grapples with a structural housing deficit of 1.5 million units,” NAHB Chief Economist Robert Dietz remarked.

Nevertheless, the NAHB expects another decline in single-family starts this year.