US housing starts increase 3.3 percent

WASHINGTON (AP) — Construction of new homes increased 3.3 percent in November — with the gain largely coming from single-family houses being built at the strongest pace in more than a decade.

The Commerce Department said builders broke ground on homes last month at a seasonally adjusted annual rate of 1.3 million units. The increase marks a key moment in the recovery from the Great Recession: Builders started work on single-family houses at the fastest pace since September 2007, which was just a few months before the start of that economic downturn.

Ralph McLaughlin, chief economist at the real estate company Trulia, said completed new homes are likely to finish at a post-recession high, but completions are still just 65 percent of their 50 year-average.

Driving the rebound in home construction has been a shortage of existing properties being listed for sale.

Fewer people are putting their property on the market, despite healthy demand from buyers because the unemployment rate is at a 17 year-low and mortgage rates remain at attractive levels. New construction has filled some of this gap with starts on single-family houses rising 8.7 percent so far this year.

Still, not enough new homes are being built to totally end the supply squeeze.

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