The U.S. housing markets made a promising surge last month, the highest in the last seven months-a promise of steady sales perhaps, which the builders see as a good sign.
The Wall Street Journal reports that construction for apartments and single-family homes have picked up and the housing market may be seen as an anchor to help the economy amid the current global scenario and impending hike in interest rates.
The jumped was recorded at 10.5 per cent, based on seasonally adjusted annual pace of 1.17 million units, the Commerce Department said on Wednesday, Dec. 16, CNBC reports.
The promising report came just when Fed officials were to resume a two-day meeting pertaining to monetary policy. There is an expected interest rate hike; the first in nearly a decade once the meeting is concluded. The housing recovery, however, despite the hike, is not expected to be derailed.
CNBC adds that, "November marked the eighth straight month that starts remained above 1 million units, the longest stretch since 2007. Economists expect housing starts to average around 1.1 million units for 2015, which would be the highest level since 2007 and up from 1.0 million units in 2014."
The strengthening labor market also encourages young adults to move out from home but the biggest obstacle they are facing is the limited supply of housing, which in turn increases the prices. This forces them to rent instead of buying their own homes.
The forecast, based on a poll made by Reuters is that housing started rising to a 1.135 million-unit in November. Single family housing record the highest increase since 2008 at 7.6 percent to a 768,000-unit pace.
In the South, where most home construction happens, single-family projects rose 8.8 percent. In the West, on the other hand, there's a jump of jumped of 15.1 per cent, the highest recorded in almost a decade.
Building permits has also increased by 11 per cent and so is single-home construction by 1.1 percent since 2007. At 26.9 percent, multi-family building permits soared the highest.
