Reach Highest Level in Six Years
U.S. housing starts surged past the 1 million mark in November, marking the highest level in nearly six years.
The latest figures from the Commerce Department show starts jumped 22.7 percent, to 1.09 million units. That's the biggest increase since January 1990, and boosted the volume to the highest level since February 2008.
"The housing pick-up is sustainable into the first half of 2014," said Jay Morelock, an economist at FTN Financial in New York. "Builders are optimistic about pent-up consumer demand, even in the face of rising rates and stronger prices."
Single-family home starts totaled 727,000, the highest level since March 2008. Analysts note that total is still far below normal, but represents an increase of almost 21 percent from the revised October figure.
Economist Jed Koko, of Trulia said the November jump doesn't look like a one-month blip because both October and November permits were also strong.
Permits to build homes fell 3.1 percent in November to a 1.01 million-unit pace, but the total (1,007,000) beat economists' expectations for a 990,000-unit pace. Permits lead starts by at least a month.
Officials with the National Association of Home Builders (NAHB) say upticks in housing starts are expected in 2014 as the industry continues to recover from the economic downturn. NAHB projects 825,000 starts for single family homes and 322,000 for multifamily homes.
NAHB Chief Economist David Crowe acknowledged those figures are well below what the association considers a normal rate of about 1.3 million for single family and 324,000 for multifamily, but builders are buoyed by improving numbers.
The NAHB/Wells Fargo builder sentiment index climbed to 58 in December, matching an eight-year high reached in August. The report showed builders are upbeat on current sales conditions, future sales and prospective buyers.