Homebuilders like PulteGroup (PHM) - Get Report got a boost Thursday after the government reported new U.S. home construction rose more than forecast to a nine-month high in November, according to data from the U.S. Commerce Department.
Residential starts climbed 1.2% month-to-month to a 1.547 million annualized rate from a downwardly revised 1.528 million count in October. Economists were expecting a median estimate for starts of 1.535 million, according to a Bloomberg survey.
PulteGroup shares jumped 3.8% to $44.13 on the news Thursday morning while Lennar (LEN) - Get Report rose 5.6% to $78.42, D.R. Horton (DHI) - Get Report gained 2.2% to $72.71, KB Home (KBH) - Get Report gained 3.2% to $35.03 and Toll Brothers (TOL) - Get Report gained 0.4% to $45.53.
“Housing remains a bright spot in an otherwise weak economy, seeing a bounce from strong demand and low mortgage rates. Lean inventories will likely continue to support building activity over coming months, mostly in the single-family sector," Rubeela Farooqi chief U.S. economist at High Frequency Economics, wrote in a report, according to Bloomberg.
While the number of new U.S. homes being built rose to a nine-month high in November, the current level of starts is still below February's pre-pandemic annual rate of 1.57 million. The rate is also 12.8% higher than the year-ago period.
Monthly housing starts data is volatile and the numbers are often later revised, however, as they were in Octobers' downward revision.
Adjusted annual housing starts in October totaled 1.528 million, downwardly revised from the previous estimate of 1.53 million starts.