Housing starts in November surged nearly 23% from the previous month, signaling an end-of-the-year pickup in the housing market, the U.S. Commerce Department reported Wednesday.
The number of homes builders started last month reached a seasonally adjusted annual rate of 1.09 million, well above an October revised estimate of 889,000.
"Astonishing November numbers but the underlying core trends are much less exciting," Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a note to clients. "Whether we can believe the numbers is another question, though; starts are very erratic from month to month and we think a clear correction in December is a good bet."
Wednesday's report also showed that building permits issued for homes declined slightly in November from the previous month, down 3.1% to a seasonally adjusted annual rate of 1.01 million. That figure, though, is nearly 8% above November 2012's estimate of 933,000.
The Commerce Department's data come just a day after the National Assn. of Homebuilders/Wells Fargo Housing Market Index reported home-builder confidence reached a four-month high in December. The reading was 58; readings above 50 indicate confidence.
The housing market had recently cooled, a trend that begin this summer. Recent housing data reports, however, signal that this latest housing pickup could extend into 2014. Experts expect housing prices to rise again in the spring.
On Monday, research firm DataQuick reported that Southern California home prices stayed essentially flat in November while sales tumbled during the typically slow fall season.
The median sales price for all homes in the six-county region inched up 0.3% from October to $385,000, DataQuick said. While prices are 19.9% higher than last year, they have been roughly flat for five straight months.
After a swift rebound earlier this year, the Southland housing market has largely been stuck in neutral since the summer. With buyers struggling to afford higher prices, demand has waned at the same time more houses have gone on sale. Buyers have stepped aside, some simply frustrated over the plethora of bidding wars during the spring.
Times staff writer Andrew Khouri contributed to this report.
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