Construction of new homes rose again in November while applications for building permits rose to the highest level in 12 years, both encouraging signs of a rebound in the housing market.
The Commerce Department said Tuesday that builders started construction on a seasonally adjusted annual rate of 1.37 million homes in November, an increase of 3.2% from October. Applications for building permits increased 1.4% last month to a seasonally adjusted rate of 1.48 million. That was the highest level for building permits since May 2007.
Construction of single-family homes rose 2.4% last month while construction of new apartments was up 4.9%.
Housing has been on a rebound over the past several months, helped by the Federal Reserve, which cut its policy rate three times this year in the face of a slowdown in global growth and uncertainties from the U.S.’s current trade policies.
The Fed’s rate cuts have contributed to a drop in mortgage rates with the 30-year rate now almost a full percentage point below where it was a year ago. Economists are forecasting that the rebound in housing will continue, helping to support economic growth next year.