In Big Surprise, Housing Starts Rise

New home construction in the U.S. jumped 5.3% in November despite rising mortgage rates and other recent signs of a slowdown in the housing market, including surveys showing homebuilders losing confidence. Ian Shepherdson, chief U.S. economist at High Frequency Economics, suggested that starts lagged behind other housing activity; if true, then starts should slow next year, which would be consistent with other analysts’ forecasts. (New homes also make up a far smaller part of the housing market than pre-owned homes.) Some economists worry that too much housing stock is coming to market which could set the stage for a big correction next year. On the other hand, others point out that homebuilders control inventory more tightly than they once did, lessening the risk of a sudden price plunge.
Housing Starts Rose 5.3% [Wall Street Journal]