A worker measures wood for a house under construction at KB Home Vineyard Crossing in Livermore, California.
David Paul Morris | Bloomberg | Getty Images
USA. housing construction rebounded in October and permits for future housing construction jumped to more than 12 years, indicating the strength of the housing market amid lower mortgage rates.
Housing start-ups rose 3.8% to a seasonally adjusted annual rate of 1
September data were revised to show that home construction was declining at a rate of 1.266 million units, instead of decreasing to a rate of 1.256 million units, as previously reported.
Economists surveyed by Reuters predicted that housing would grow at a rate of 1,320 million units in October.
Housing starts advancing by 8.5% year-on-year in October. Building permits rose 5.0% to 1.461 million units in October, the highest level since May 2007. Permits were driven by the single-family residential segment, which increased 3.2% to the highest level since August. 2007
The housing market, the most sensitive sector to interest rates, has intensified in recent months, catching up with the Federal Reserve's monetary policy easing mortgage rates from last year's perennial highs.
However, the sector, which accounts for about 3.1% of the economy, is still hampered by a shortage of land and labor. Monday's survey showed confidence among home builders who are nearing a maximum of 1-1 / 2-year-olds in November.
However, builders complain of "lack of manpower and regulatory constraints", adding that "the scarcity of many remains a serious problem, especially among custom builders. "
Housing starts reaching a 12-year high in August. But momentum can slow, with mortgage rates reversing over the last two months.
The Fed cut interest rates for the third time this month last month and signaled for a pause in the easing cycle that began in July when it cut its borrowing costs for the first time since 2008.
While fears of recession have disappeared in recent months amid de-escalation of trade tensions between the United States and China, the economy is increasingly still slows down in the background of slowing consumer spending and persistent weakness in business investment
The 30-year fixed mortgage rate is currently 3.75%, still below its peak of 4.94% in November 2018, according to the Mortgage Financing Agency Freddy Mac
Residential investment recovered in the third quarter after contracting for six straight quarters, the longest since recession in 2007.
Single-family housing, which accounts for the largest share of the housing market , increased by 2.0% to a percentage of 936,000 units in October, the highest for 9 months. Single-family homes began rising in the West, Midwest and South in the last month. They fell to the northeast.
The launch of the volatile multifamily housing segment increased by 8.6% to 378,000 units in October. Permits to build multi-family homes increased 8.2% to 552,000 units last month.