US housing starts rise more than forecast to 8-month high

[WASHINGTON] US home construction starts strengthened in November to the fastest pace in 8 months, suggesting builders are making a bit more headway on backlogs even as supply and labor constraints linger.

Residential starts rose 11.8 per cent last month to a 1.68 million annualised rate, according to government data released on Thursday (Dec 16). The median estimate in a Bloomberg survey of economists called for a 3.1 per cent gain in November from the prior month, and a 1.57 million pace.

Applications to build, a proxy for future construction, climbed to an annualised 1.71 million units in November.

Demand for new properties - fuelled by low mortgage rates, a dearth of options in the resale market, and a pandemic-era desire for more space - has held firm despite exorbitant prices. A measure of confidence among homebuilders reached a 10-month high in December on stronger sales and greater foot traffic from prospective buyers.

Still, supply chain delays and labour shortages have driven up costs and hampered developers' ability to break ground on new projects.

Single-family starts increased 11.3 per cent in November to an annualised pace of 1.17 million units, also the strongest since March. Multifamily starts - which tend to be volatile and include apartment buildings and condominiums - jumped almost 13 per cent to a 506,000 rate, the fastest since February of last year. In a sign that builders are chipping away at backlogs, the number of one-family housing units still under construction increased to 752,000 in November, the most since 2007. Beginning construction of single-family dwellings jumped 14.4 per cent in the south to an annualised 701,000 rate that was the strongest in 15 years. One-family starts also picked up in the other 3 regions.

BLOOMBERG