- November housing starts rose 14.8% from the prior month, hitting an annual level of 1.56 million.
- The jump came as a surprise, as Wall Street had expected 1.36 million.
Housing starts saw an unexpected 14.8% jump in November compared to the prior month, according to Census Bureau data released Tuesday.
The annualized rate climbed to 1.56 million last month from October's downwardly revised rate of 1.359 million. Wall Street was expecting 1.36 million.
The number of homes completed rose 5% to 1.45 million. At the same time, permits for new homes declined 2.5% to 1.46 million, roughly in line with expectations, and are down 4.1% from a year ago.
"American housing demand is permanently higher than before the pandemic since people are spending more time at home — the rise of remote work, more home schooling, introverts blossoming into their true selves, and so on," Comerica chief economist Bill Adams said. "As long-term interest rates fall, builders will add more supply to the housing market to meet that demand, fueling economic growth."
Meanwhile, mortgage rates have continued to slide lower. Earlier this week, rates on the 30-year fixed mortgage dipped below 7% for the first time since August.
Falling rates have coincided with a reversal in homebuilder sentiment. The National Association of Home Builders/Wells Fargo gauge showed Monday that the measure climbed 3 points to 37, which marked the first uptick in five months.
"The housing market appears to have passed peak mortgage rates for this cycle, and this should help to spur home buyer demand in the coming months," Robert Dietz, NAHB chief economist said in the release.