NEW YORK – New home construction in the United States accelerated to a record pace in December, the government said Wednesday, Jan. 21.
The Commerce Department said the pace of housing starts rose 1.7 percent to a seasonally adjusted annual rate of 2.09 million units, after rising a revised 3.9 percent to 2.05 million units in November. Economists, on average, expected housing starts to dip to a 1.95 million-unit pace, according to Briefing.com.
Building permits, a forward-looking indicator of housing demand, rose 3.3 percent to an annualized rate of 1.924 million units after falling 6 percent in November to a rate of 1.863 million units.
U.S. stock market futures turned lower after the report, pointing to a negative opening on Wall Street. Treasury bond prices rose.
The housing market has been one of the strongest sectors of the economy in recent years, helped along by the lowest mortgage rates in a generation. Rates began to rise in the second half of 2003, ending a boom in mortgage refinancing and leading many analysts to expect the housing market to slow down in 2004.
But interest rates have stayed stubbornly low, keeping housing demand high. Last week, the Mortgage Bankers Association’s index for mortgage applications rose to its highest level since the MBA started keeping track in 1990.
Source: CNN/Money