U.S. Housing Starts Spike 11.8% In November, Much More Than Expected

New residential construction in the U.S. soared by much more than expected in the month of November, according to a report released by the Commerce Department on Thursday.

The report said housing starts skyrocketed by 11.8 percent to an annual rate of 1.679 million in November after slumping by 3.1 percent to a revised rate of 1.502 million in October.

Economists had expected housing stocks to jump 3.0 percent to a rate of 1.565 million from the 1.520 million originally reported for the previous month.

The much stronger than expected growth reflected sharp increases in both single-family and multi-family starts, which spiked by 11.3 percent and 12.9 percent, respectively.

The Commerce Department said building permits also shot up by 3.6 percent to an annual rate of 1.712 million in November after surging 4.2 percent to a revised rate of 1.653 million in October.

Building permits, an indicator of future housing demand, had been expected to rise by 0.6 percent to a rate of 1.660 million from the 1.650 million originally reported for the previous month.

Single-family and multi-family permits both showed notable increases, jumping by 2.7 percent and 5.2 percent, respectively.

Compared to the same month a year ago, housing starts in November were up by 8.3 percent, while building permits were up by 0.9 percent.

“Strong demand, sparse inventory and upbeat homebuilder sentiment should support new home construction around the current pace as we head into 2022,” said Nancy Vanden Houten, Lead Economist at Oxford Economics.

She added, “Homebuilders also have a record backlog of starts to work through, although supply chain snags may continue to lengthen construction timelines.”

On Wednesday, the National Association of Home Builders released a separate report showing a modest improvement in U.S. homebuilder confidence in the month of December.

The NAHB/Wells Fargo Housing Market Index inched up to 84 in December from 83 in November, reaching its highest level since a matching reading in February. The uptick came in line with economist estimates.

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