U.S. Housing Starts Increase to 19-Month High in November

U.S. housing starts increased 9.3 percent in November to a 19-month high, according to the Census Bureau and Department of Housing and Urban Development (HUD).

Housing starts in November totaled a seasonally adjusted annual rate of 685,000, the highest level since April 2010, up from October's 627,000 housing starts and up 24.3 percent from November 2010's 551,000 starts.

Multifamily buildings with five or more units had the greatest increase in starts, jumping 32.3 percent compared to the previous month and 180.5 percent compared to the previous year. The national rental market is outpacing sales as more Americans look to rent in an uncertain economy, leading to many developers seeking to built rentals.

Regionally, housing starts increased month-over-month by 53.8% in the northeast -- benefitting from activity in major cities like New York and Washington D.C. -- and rose 22.6% in the West and 4.1% in the South. Starts fell 18.2% in the midwest.

In November, a seasonally adjusted annual rate of 681,000 building permits were issued for private homes, up 5.7 percent from 644,000 building permits in October and up 20.7 percent from 564,000 permits in November 2010.

Private housing completions totaled an annual rate of 542,000, 5.6 percent higher than 574,000 in October, but 1.6 percent below November 2010.

There are other signs that the residential construction industry is improving, with homebuilder confidence rising and Fitch's 2012 outlook for the industry predicting modest gains and stability.

However, housing construction is still far below historic norms, when over 1 million homes would be built in a year, and a glut of foreclosures and distressed sales continue to drag down home prices.