WASHINGTON Starts of new housing construction rose in November, led by a surge in apartments and other multifamily homes, government figures showed.
Single-family starts fell for a third straight month.
Starts rose 2.2%, to an annual rate of 1.562 million, the Commerce Department said Wednesday. In October starts fell 0.6%, to a 1.528 million pace.
The recent drop in mortgage rates is good for housing, but declines in consumer optimism and the stock market are restraining construction and the economy.
Weve seen a decent pace of sales in recent months, but weve seen builders become very cautions in starting new homes, said Michael Moran, chief economist at Daiwa Securities America Inc. in New York. Theyre reluctant because theyre concerned with being stuck with unsold inventory. Single-family starts are generally stable but in no way improving.
Starts of single-family homes fell 0.4% in November, to 1.220 million at an annual rate, from 1.225 million annually in October. New construction of multifamily homes rose 12.9%, to 342,000 annually.
Permits for new housing construction rose 2.6%, to an annual 1.586 million. But the increase was led by a rise in permits for multifamily projects; permits for single-family construction fell.
The West showed the only increase in November starts. That region showed a 28.1% surge in new home construction. Starts fell 10.9% in the Northeast, 5.2% in the South, and 1.9% in the Midwest.
Builders now are on pace to end 2000 having started 1.603 million single-family homes, apartments, condominiums, and townhouses. Builders began work last year on 1.667 million homes, the most started during the current economic expansion, after starting 1.617 million in 1998.
Falling mortgage rates have underpinned housing. The drop in rates is attributed to expectations that Federal Reserve policymakers will lower interest rates in early 2001. On Tuesday the Feds Open Market Committee kept the overnight bank lending rate at 6.5% while warning that weaker economic growth is a bigger risk to the expansion than accelerating inflation.