Housing Starts Exceed 1 Million Pace for Third Month
New-home construction in the U.S. exceeded a 1 million annualized pace in November for a third consecutive month, continuing a slow recovery in the housing market.
While housing starts declined 1.6% to a 1.03 million annualized rate, they retreated from a 1.05 million pace in October that was stronger than previously estimated, figures from the Commerce Department showed in Washington.
The median estimate of 76 economists surveyed by Bloomberg News was for a 1.04 million rate. The last time starts exceeded 1 million for three months straight was in early 2008.
The decrease in starts was focused in the South as other area showed gains, and building permits also decreased last month, a sign housing will remain in a plodding recovery into 2015.
Continued job gains and lower mortgage rates will probably support demand as first-time and younger buyers still struggle to get into the market.
“The housing recovery should revive in 2015,” Mark Zandi, chief economist at Moody’s Analytics Inc., said before the report. “If we have lower mortgage rates and we get more credit, and you throw in some better wage growth and lower unemployment, that does suggest that we have a housing demand pickup and that lifts construction activity as well.”
Estimates for housing starts in the Bloomberg survey ranged from 900,000 to 1.1 million. Building permits declined 5.2% in November to a 1.04 million annualized rate after an October pace of 1.09 million. They were projected to fall to 1.07 million within a range of 1.01 million to 1.1 million.
Construction of single-family houses decreased to a 677,000 rate, the report showed. Work on multifamily homes, such as apartment buildings, climbed 6.7 % to a 351,000 rate. Work on these projects is often volatile.
Only the South showed a drop in starts, falling 19.5% in November. The West jumped 28.1% on a surge in multifamily projects.
