New-home construction in the US rebounded in November, led by gains in single-family dwellings that signal the residential real estate industry will continue to support growth in the world’s largest economy.
Housing starts climbed 10.5 per cent to a 1.17 million annualized rate, from a 1.06 million pace in October, figures from the Commerce Department showed Wednesday in Washington. Work began on the most stand-alone houses since January 2008, and permits for similar projects reached an eight-year high.
Housing Starts US: November 2015
Building permits increased 11 per cent in November to a 1.29 million annualized rate, the most since June. Construction of single-family houses increased to a 768,000 rate from 714,000 in October, and the Commerce Dept report showed gains may continue. Building applications for single-family projects rose to a 723,000 pace, the most since December 2007.
Single-family dwellings make up the biggest part of the market and are subject to less volatility.
Work on multifamily homes, such as apartment buildings, rose 16.4 percent to a 405,000 rate. Data on these projects, which have led housing starts in recent years, can be volatile.
Two of four regions had an increase in starts in November, paced by an 21.3 percent jump in the South, according to the report.
Single-family housing starts, the largest segment of the market, increased 7.6 per cent to a 768,000-unit pace. That was the highest reading since January 2008. Activity was probably also boosted by mild weather. Ground- breaking on single-family projects rose in the South, Northeast and West, but fell in the Midwest.
Starts for the volatile multi-family segment surged 16.4 per cent to a 405,000-unit pace. That segment has been the driver of residential construction but a shift towards single-family homes is expected in 2016.
“Homebuilders are making progress addressing the shortage of newer vintage single-family homes we see in many markets, especially affordable housing products with a price of under US$200,000,” said Tian Liu, chief economist at Genworth Mortgage Insurance in Raleigh, NC.
Permits to build single-family homes increased 1.1 per cent last month to the highest since December 2007. Multi-family building permits soared 26.9 per cent.