Builders started construction at an annual pace of 861,000 homes last month, according to the Census Bureau, down 3% from October’s pace. But that still put starts 21.6% above year-ago levels — another sign of the recent rebound in the housing market.
Part of the decline may have been the aftermath of Superstorm Sandy, which hit the Northeast on Oct. 29. The pace of housing starts in the Northeast dropped 5.2% compared with October.
Builders’ application for new building permits rose 3.6% from October’s level and 26.8% compared with November of 2011. Permits are less affected by weather than are actual starts and are seen as an indicator of builders’ confidence in the market. A survey by the National Association of Home Builders Tuesday showed the highest level of confidence in the market since April of 2006, just before the housing bubble burst.
The housing market has been showing numerous other signs of recovery in recent months. Demand for homes have been helped by mortgage rates near record lows.
Foreclosures have fallen to a five-year low, reducing the supply of distressed homes available on the market and helping to lift home prices, giving builders more incentive to start building again. And four years of depressed levels of home building have cut the supply of new homes on the market to near-record lows, according to a separate government report.