Housing Starts at Six Year High

Housing starts jumped 22.7 percent in November to 1,091,000, well above an annual revised October estimate of 889,000 for October and the highest level in six years. The rate for single family housing starts leapt 20.8 percent to 727,000 while the rate for multi-family units rose 26.8 percent to 354,000. The report by the Commerce Department included data for the past three months due to the delay caused by the government shutdown in October. September housing starts dropped 1.1 percent but climbed back up 1.8 percent in October.

The strength of November starts is good news for the economy and may have influenced the Federal Open Market Committee (FOMC) in their deliberations on Wednesday. The FOMC said in its Dec. 18 statement: “Beginning in January, the Committee will add to its holdings of agency mortgage-backed securities at a pace of $35 billion per month rather than $40 billion per month, and will add to its holdings of longer-term Treasury securities at a pace of $40 billion per month rather than $45 billion per month.”