2019.12.1713:27:00UTC+00U.S. Housing Starts Jump More Than Expected, Building Permits Reach 12-Year High

New residential construction in the U.S. soared by more than expected in the month of November, according to a report released by the Commerce Department on Tuesday.

The report said housing starts surged up by 3.2 percent to an annual rate of 1.365 million in November after spiking by 4.5 percent to a revised 1.323 million in October.

Economists had expected housing starts to jump by 2.4 percent to a rate of 1.345 million from the 1.314 million originally reported for the previous month.

Housing starts rose for the second straight month following a sharp pullback in September, climbing back near the twelve-year high of 1.375 million set in August.

Single-family housing starts shot up by 2.4 percent to a rate of 938,000 in November, while multi-family starts spiked by 4.9 percent to a rate of 427,000.

Building permits, an indicator of future housing demand, also climbed by 1.4 percent to an annual rate of 1.482 million in November after soaring by 5 percent to a rate of 1.461 million in October.

The continued increase came as a surprise to economists, who had expected building permits to slump by 3.5 percent to a rate of 1.410 million.

With the unexpected increase, building permits reached their highest level since hitting a rate of 1.493 million in May of 2007.

Multi-family permits led the way higher, jumping by 2.5 percent to a rate of 564,000 in November. Single-family permits rose by 0.8 percent to a rate of 918,000.

Compared to the same month a year ago, housing starts in November were up by 13.6 percent, while building permits were up by 11.1 percent.

A separate report released by the National Association of Home Builders on Monday unexpectedly showed a substantial improvement in U.S. homebuilder confidence in the month of December.

The report said the NAHB/Wells Fargo Housing Market Index spiked to 76 in December from an upwardly revised 71 in November.

Economists had expected the index to come in unchanged compared to the 70 originally reported for the previous month.

With the unexpected jump, the housing market index reached its highest level since hitting 77 in June of 1999.