With a spike in new construction of multi-family homes more than offsetting a continued decrease in new construction of single-family homes, the Commerce Department released a report on Tuesday showing a substantial increase in U.S. housing starts in the month of November.
The Commerce Department said housing starts jumped by 3.2 percent to an annual rate of 1.256 million in November from the revised October estimate of 1.217 million.
Economists had expected housing starts to edge down to a rate of 1.225 million from the 1.228 million originally reported for the previous month.
Multi-family starts soared by 22.4 percent to an annual rate of 432,000, although the spike was partly offset a 4.6 percent drop in single-family starts to a rate of 824,000.
The report also said building permits surged up by 5.0 percent to an annual rate of 1.328 million in November from the revised October rate of 1.265 million.
Building permits, an indicator of future housing demand, had been expected to dip to a rate of 1.259 million from the 1.263 million originally reported for October.
While single-family permits crept up just 0.1 percent to a rate of 848,000, multi-family permits shot up by 14.8 percent to a rate of 480,000.
On Monday, the National Association of Home Builders released a separate report unexpectedly showing a continued deterioration in homebuilder confidence in the month of December.
The report said the NAHB/Wells Fargo Housing Market Index dropped to 56 in December after tumbling to 60 in November. Economists had expected the index to inch up to 61.
With the unexpected monthly decrease, the housing market index tumbled to its lowest level since hitting 54 in May of 2015.
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