US housing starts jump past forecasts in November

A closely-followed gauge of activity in the US housing market accelerated noticeably last month, together with a pick-up in a key lead indicator for the sector.

According to the Department of Commerce, the rate of growth in US housing starts rose at a month-on-month pace of 3.2% in November to reach an annualised pace of 1.365m

(consensus: 1.34m).

Starts were 13.6% higher versus a year ago, with those for single-family homes growing by 2.4% versus October and by 16.7% from the year earlier level to reach 916,000.

Growth in housing permits, which many analysts consider to be a reliable lead indicator for starts, also outpaced forecasts, rising by 1.4% to reach an annualised clip of 1.482m.

October's preliminary reading for starts of 1.314m was revised higher to 1.323m.

Commenting on Tuesday's housing figures, Blerina Uruci and Pooja Sriram at Barclays Research said: "permits data continue to point to positive momentum for starts over the coming months. We expect the housing market to stabilize further over the coming quarters and believe that the decline in mortgage rates from their highs late last year may already be providing some modest support.

"Nevertheless, we do not expect activity to accelerate quickly from here. Rather, we retain our view that starts for housing construction are most likely to move sideways in the coming months, with further downward pressure on the rate of house price appreciation gradually helping to boost affordability."