WASHINGTON – Builders broke ground on more homes in November than at any time in over five years as growing demand helped the industry overcome rising U.S. mortgage rates.
Housing starts jumped 22.7 percent to a 1.09 million annualized rate, exceeding all forecasts of economists surveyed by Bloomberg and the most since February 2008, data from the Commerce Department showed Wednesday. Permits for future projects held near a five-year high, indicating the pickup will be sustained into 2014.
Gains in construction will probably boost economic growth this quarter as an improving job market propels homebuilding to its best year since 2007. The economy seems to be picking up and theres quite a lot of pent-up demand, said David Sloan, senior economist at 4Cast Inc. in New York. Even if the Fed does start to taper (its stimulus campaign), I think the housing market will prove resilient.
Wednesdays data offered the first look at housing starts since August readings after a government shutdown in October delayed reports.
Starts of single-family houses climbed 20.8 percent in November, the most since March 2008. Last months jump was the biggest since February 1991. Work on multifamily projects such as condominiums and apartment buildings increased 26.8 percent, the most since March.
Three of four regions showed an increase in ground-breaking last month, led by a 41.7 percent surge in the Midwest and a 38.5 percent jump in the South that was the biggest since July 1982. Starts climbed 8.8 percent in the West and fell 29.4 percent in the Northeast.