FXStreet (Mumbai) – U.S. building permits in November jumped to 1.289 million, hitting a five month high. Housing starts in November also increased from a seven-month low to record 1.173 million, up from the previous 1.06 million. The Commerce Department said today that privately-owned housing starts in November were at a seasonally adjusted annual rate of 1,173,000. This is 10.5 per cent above October’s revised estimate of 1,062,000.
With the increase in November, the housing starts have managed to stay above 1 million units for the eighth straight month, the longest stretch since 2007. Economists now estimate housing starts to average around 1.1 million units for 2015, the highest since 2007 and up from 1.0 million units in 2014.
Single-family housing starts, the largest segment of the market, increased 7.6 per cent to a 768,000-unit pace, registering the highest reading since January 2008. Starts for the volatile multi-family segment jumped 16.4 per cent. Building permits saw 11 per cent rise in November, the highest since June. Permits for the construction of single-family homes increased 1.1 per cent last month; while multi-family building permits increased 26.9 per cent.
As evident from the data, permits have stayed ahead of housing starts in November, raising hopes that grounbreaking will continue to remain supported. Groundbreaking jumped 10.5 per cent in November to a seasonally adjusted annual pace of 1.17 million units.
Healthy household formation together with rising strength in labor market has led young adults to leave their childhood homes and build their own. This has revived hopes of housing market recovery. However, the sector continues to be challenged by lower number of houses available to be sold, which has caused prices to rise faster than salaries. As a result many people have shunned home ownership and have opted for rented accommodation.
(Market News Provided by FXstreet)