Housing starts in October unexpectedly climbed to a four-year high, indicating further improvement in U.S. residential construction.
Starts rose 3.6 percent to a 894,000 annual rate, the fastest since July 2008 and exceeding all estimates in a Bloomberg survey, Commerce Department figures showed today in Washington. The median estimate of 82 economists called for starts to fall to a 840,000 pace. Building permits, a proxy for future construction, eased after surging the previous month.
Record-low mortgage rates and a lower risk that property values will keep falling may continue to attract buyers, giving the economy a lift and benefiting companies such as Toll Brothers Inc. (TOL) Federal Reserve Chairman Ben S. Bernanke is among policy makers who have singled out housing as one of the industries to nurture in order to spur the economic recovery.
“Housing is absolutely going in the right direction,” said Harm Bandholz, chief U.S. economist at UniCredit Group in New York, who projected 870,000 starts at an annual rate. “Excess supply has been wound down and there’s a steady increase in demand. That’s good for construction.”