Builders stateside are stepping up home construction, suggesting the housing market will help anchor the economy amid global turbulence and a likely rise in interest rates.
Builders broke ground on 1.173 million units, when calculated at a yearly rate, in November, up 10.5% from a month earlier, the U.S. Commerce Department said Wednesday. Construction moved forward at roughly the same pace in the first 11 months of the year compared with the same period of 2014.
The across-the-board gains suggest builders are gaining confidence that home sales will remain steady over the next year despite the likelihood that the Federal Reserve will raise interest rates at its policy meeting Wednesday. Mortgage rates could eventually rise as a result but are expected to remain at historically low levels for a while.
A sustained improvement in home construction would help boost the American economy by creating construction jobs and demand for a host of goods, from wood paneling to furniture.
Wednesday’s report offered several encouraging signs on that front. Building permits — a bellwether for construction in coming months—climbed 11% in November from October to an annual pace of 1.289 million. They are up 13.4% this year compared with last.
