(Sharecast News) – US housing starts were higher than expected in November as mortgage rates began to soften, according to the Commerce Department.
Housing starts surged by 14.8% in November to a seasonally-adjusted annual rate of 1.56 million and against expectations of a 1.36 million rise. They were also up 9.3% year on year.
Building permits, which are seen as a forward gauge of activity, were 1.460 million were down 2.5% month on month and against estimates of 1.465 million.
“Our forecast is for housing starts to slow to a pace of 1.3mn in Q1. We don’t expect the November pace of starts to be sustained, but taken as a whole, the November data, along with the recent decline in mortgage rates below 7% lend an upside risk to that forecast,” said Nancy Vanden Houten, lead US economist at Oxford Economics.
“Both single- and multi-family starts posted solid gains in November and starts rose in all regions. Going forward, we think multi-family starts – where supply is more plentiful and lending standards have tightened more – are more vulnerable to a decline. Recovering homebuilder sentiment and an ongoing need for inventory should cushion the downside for single-family starts.”
Reporting by Frank Prenesti for Sharecast.com
