US housing starts, permits climb in November
20 December 2005
Reuters News
WASHINGTON, Dec 20 (Reuters) - U.S. housing starts rose 5.3 percent in November as groundbreaking on both single-family and multifamily units climbed, the Commerce Department reported on Tuesday.
November housing starts increased to a 2.123 million unit annual rate, faster than the 2.017 million unit annual rate expected by Wall Street economists, who had anticipated rising mortgage rates would cool activity. October starts were revised up to a 2.017 million unit annual pace from the originally reported 2.014 million unit rate.
Single-family housing starts rose 4.8 percent to a 1.808 million unit annual rate while starts on multifamily units jumped 7.9 percent to a 315,000 unit pace.
Permits for future groundbreaking, an indicator of builders' confidence, rose 2.5 percent in November to a 2.155 million unit pace. Economists had expected permits to fall to a 2.093 million unit pace from October's revised 2.103 million unit pace.
The department said permits for single-family homes increased 0.2 percent, but jumped 15 percent for housing with five or more units - marking the biggest percentage increase since July 2004, when it surged 18.2 percent.
Low mortgage rates have supported a five-year rally in the housing market, but borrowing costs have started to climb. Mortgage finance company Freddie Mac said the 30-year fixed-rate mortgage averaged 6.30 percent in the latest week compared with 5.68 percent a year ago.
Economists say higher rates should dampen homebuyer demand and cool the market, and recent months' housing data has shown some signs of a moderation in the sector.
The Commerce Department cautions that month-to-month changes in the housing starts statistics may show irregular movements and that it may take four months to establish an underlying trend for permits and six months for starts.
On Monday, the National Association of Home Builders said its NAHB/Wells Fargo Housing Market index slid to 57 in December from a revised 61, sending some builders' shares down more than 3 percent.
Starts climbed throughout most of the country, except the U.S. South, which reported a 1.3 percent decline in groundbreaking. Starts rose 12.3 percent in the Midwest, 11.5 percent in the West and 11 percent in the Northeast.
The 580,000 unit pace of housing starts in the West was the fastest for that region since December 1978, when it was 645,000 units, the Commerce Department said.
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