(Update with details)
By Lucia Mutikani
WASHINGTON, Nov 18 (.) – Homebuilding in the United States rose more than expected in October, suggesting that the housing market continues to be supported by mortgage rates that are at record lows, even as the country’s economic recovery complicated by the rise in COVID-19 cases.
Wednesday’s Commerce Department report followed data from the previous day that showed the smallest gain in retail sales in October since the recovery from the pandemic began in May. The economy is slowing as the momentum of fiscal stimulus wanes.
Home construction starts rose 4.9% to a seasonally adjusted annual rate of 1.53 million units last month. The September figure was revised up, to a rate of 1.459 million units from the 1.415 million that were initially reported.
Economists consulted by . had projected 1.46 billion units.
Start-up activity increased in the West, South, and Midwest, but decreased in the Northeast. Home construction increased 14.2% year-on-year.
Construction of single-family homes, the largest share of the housing market, advanced 6.4% to a seasonally adjusted annual rate of 1,179 million units last month, the highest level since April 2007. The beginnings for the volatile segment Multifamily were unchanged at a rate of 351,000 units.
The housing market has largely ignored a weak job market, which has left more than 20 million Americans applying for unemployment assistance. The coronavirus recession, which began in February, has disproportionately affected those with lower wages.
For now, companies are taking advantage of strong demand, tight inventories, and low mortgage rates to boost construction. A survey on Tuesday showed confidence among single-family home builders rose to an all-time high in November.
Permits for future home construction were unchanged at a rate of 1.545 million units in October. Single-family building permits rose 0.6% to a rate of 1.12 billion units last month. Building permits for multi-family housing projects fell 1.6% to a rate of 425,000 units.
(Report by Lucia Mutikani, Edited in Spanish by Janisse Huambachano and Manuel Farías)