U.S. homebuilding surged to an eight-month high in November amid an acute shortage of properties on the market, though higher prices for raw materials and labor shortages remain a constraint.
Housing starts increased 11.8% to a seasonally adjusted annual rate of 1.679 million units last month, the highest level since March, the Commerce Department said on Thursday. Data for October was revised down to a rate of 1.502 million units from the previously reported 1.520 million units.
Economists polled by Reuters had forecast starts rising to a rate of 1.568 million units. Starts for both single-family and multi-family housing projects rose last month.
Permits for future homebuilding increased 3.6% to a rate of 1.712 million units in November.
Starts dropped from the 1.725 million unit-pace scaled in March, which was more than a 14-1/2-year high as builders struggled with shortages and more expensive raw materials.
Nonresidential construction input prices increased by nearly 25% in the 12 months through November, according to producer price data released this week. There is a huge backlog of houses authorized for construction but not yet started.
A survey from the National Association of Home Builders on Wednesday showed confidence among single-family homebuilders rose for a fourth straight month in December, but noted that “finding workers, predicting pricing and dealing with material delays remains a challenge.”