Housing starts shot up 6.9 percent in November, the largest increase in eight months, as new construction rebounded from the previous month's decline.
Analysts attributed the surprising surge was attributed in large part to unusually warm weather in the Northeast and Midwest. They said they still expect rising mortgage rates to put a damper on single-family construction."There may be a December payback for the temporary spike in November housing starts," said economist Jose Rasco of Merrill Lynch & Co. in New York. "In any case, the outlook is for a decline in residential construction in 1995."
The Commerce Department said builders broke ground on 1.54 million units at a seasonally adjusted annual rate, up from 1.44 million in October. Starts are 14.2 percent higher than they were through the first 11 months of 1993.
The November gain is the biggest since starts rose 14.4 percent in March. Single-family construction rose 3.7 percent last month at a seasonally adjusted rate of 1.2 million.