Construction spending jumped 1.2 percent to a seasonally adjusted annual rate of $934.5 billion in the month from an upwardly revised $923.8 billion in October, the Commerce Department said. Analysts polled by Reuters were expecting a 0.5 percent increase.
It was the fifth month in a row in which total construction spending hit a new high. Total private construction, total public construction, private residential construction and state and local construction all climbed to fresh records.
Private residential construction spending rose 2 percent to $495.7 billion from $486.2 billion.
Interest rates on the popular 30-year fixed rate mortgage rose to 5.85 percent last week according to mortgage finance company Freddie Mac, but were not much above 40-year lows touched in June. A Freddie Mac economist said home buyers are increasingly turning to adjustable-rate mortgages in search of lower interest rates.
At the same time, sales of new homes and home resales fell in November, a sign of a maturing housing market, according to analysts.
Also, new mortgage applications fell in late December to their lowest weekly level in 2003, the Mortgage Bankers Association said last week.
Home sales hit a record last year as buyers took advantage of low interest rates, but analysts expect 2004 to be a slower year for the housing sector, which was one of the bright spots last year as the economy struggled to recover from the recession that ended in late 2001.
Source: CNN/Money Magazine