Housing starts jumped a dramatic 22.7% in November, compared to October, according to the U.S. Census Bureau and U.S. Department of Housing and Urban Development's monthly new residential construction report.
The annualized rate for the number of housing starts as of Nov. 31 was about 1,091,000 – a 22.7% increase over the revised October estimate of 889,000 and 29.6% above the November 2012 rate of 842,000.
Single-family housing starts in November were at a rate of about 727,000 – about 20.8% above the revised October figure of 602,000. The November rate for units in buildings with five units or more was 354,000 – meaning that more than a third of the new housing built so far this year was multifamily.
Housing completions in November were at a seasonally adjusted annual rate of about 823,000 – about 0.1% below the revised October estimate of 824,000, but 21.6% above the November 2012 rate of 677,000.
Single-family housing completions in November were at a rate of about 596,000 – about 3.2% below the revised October rate of 616,000. The November rate for units in buildings with five units or more was about 221,000.
Building permits were down about 3.1% compared to October, but were up 7.9% compared to November 2012.
Earlier this week, the National Association Of Home Builders (HAHB) released its monthly market index showing that builder confidence in the market increased four points in November, based on pent-up demand from homebuyers looking for new construction.
A lack of inventory of new homes is also driving increased demand from home buyers, which, in turn, has helped boost builder confidence in the market.
‘The recent spike in mortgage interest rates has not deterred consumers as rates are still near historically low levels,’ says David Crowe, chief economist for the NAHB.Â ‘Following a two-month pause in the index, this uptick is due in part to the release of the pent-up demand caused by the uncertainty generated by the October government shutdown. We continue to look for a gradual improvement in the housing recovery in the year ahead.’
With rising mortgage interest rates, increasing home prices, and a still-fragile economy, however, it remains to be seen how long the increased demand for new construction will last.
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