The four-year boom in home building is over, according to U.S. Housing Markets, a publication of Lomas Mortgage USA.
"Rising interest rates have slammed the lid on U.S. home building," the publication said. It noted that, in the fourth quarter, builders obtained 7% fewer one-family permits than they had a year earlier, despite mild weather.
The downturn is the first since the first half of 1991.
The publication added that builders last year enjoyed their best year since 1986 and third-best year in history despite the downturn in the second half.
"Some regions and some major metropolitan markets will continue their housing rebound this year but at a reduced pace," said Robert R. Denton, executive vice president of Lomas Financial Group.
Mr. Denton said California would see further improvement, but total permits remained near historic lows.
All regions of the country showed declines in permits, but the sharpest were in the Middle West and South, 7.9% and 8.7%, respectively.