US housing beats expectations; building permits flat

WASHINGTON ( Reuters) – US home building increased more than expected in October, suggesting the housing market continues to be sustained by record low mortgage rates even as the economic recovery shows signs of strain amid a resurgence in new COVID- 19 infections.

The report from the Commerce Department on Wednesday followed on the heels of data on Tuesday showing the smallest gain in retail sales in October since the recovery from the pandemic started in May. The economy is slowing as the boost from fiscal stimulus diminishes.

Housing starts rose 4.9% to a seasonally adjusted annual rate of 1.530 million units last month. Data for September was revised up to a pace of 1.459 million units from the previously reported 1.415 million.

Economists polled by Reuters had forecast starts would rise to a rate of 1.460 million units in October. Groundbreaking activity increased in the West, South and the Midwest, but fell in the Northeast. Home building surged 14.2% on a year- onyear basis.

Single- family home building, the largest share of the housing market, raced 6.4% to a seasonally adjusted annual rate of 1.179 million units last month, the highest level since April 2007. Starts for the volatile multi- family segment were unchanged at a pace of 351,000 units.

The housing market has largely shrugged off a weak labor market, which has left more than 20 million Americans on unemployment benefits. The coronavirus recession, which started in February, has disproportionately affected lower- wage earners.