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New home starts climb in November

December 17, 2010 - The pace of new home construction improved in November, an encouraging sign for families packing their moving boxes and searching for new homes in the next few months.

Housing starts reached a seasonally adjusted annual rate of 555,000 in November, an increase of 3.9 percent from October's revised pace of 534,000, reported the Commerce Department. At the same time, new home construction remained 5.8 percent below levels from a year earlier and building permits slid 4 percent from the previous month. But the latter decrease was mostly led by a large drop in the volatile multifamily permits sector, which dropped 23 percent from the previous month. Single-family permits actually ticked up 3 percent.

Analysts say builders may be reacting to rising demand for new homes, which could be driven by financially confident buyers with plans of relocating into a newly-built home.

"Builders are very cautiously adding to their diminished inventories in preparation for the spring buying season and an anticipated modest revival in buyer demand when the economy shows more signs of improvement," said Bob Jones, chairman of the National Association of Home Builders.

The report comes just a day after builders expressed little change in their outlook for the housing market. The NAHB reported that builders' expectations for current and future home sales remained unchanged in November from the month before.
 

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