U.S. single-family homebuilding surged to more than a 1-1/2-year high in November and could gain further momentum, with declining mortgage rates and incentives from builders likely to draw potential buyers back into the housing market.
The report from the Commerce Department on Tuesday also showed permits for future construction of single-family housing last month increased to the highest level since May 2022. A jump in mortgage rates had dampened new construction activity in recent months. The new housing market remains underpinned by an acute shortage of previously owned homes available for sale.
Single-family housing starts, which account for the bulk of homebuilding, jumped 18.0% to a seasonally adjusted annual rate of 1.143 million units last month, the Commerce Department’s Census Bureau said. That was the highest level since April 2022.
Activity was also likely supported by warmer temperatures and dry conditions. Data for October was revised slightly lower to show starts rising to a rate of 969,000 units instead of the previously reported 970,000 units.
Single-family homebuilding soared in the Northeast, Midwest and the densely populated South. It declined in the West.