Strong Housing Starts for November Shows Builder Confidence in the Real Estate Market

The U.S Department of Housing and Urban Developement released its November 2005 housing starts figures today and they indicated a surprising increase of 5.3% over October and 17.5% higher than November 2004. Although interest rates have rising to the highest in 2 years at 6.3% average builders are showing that they still believe the real estate market has legs.

Additionally a building permits are also up 2.5% over October and 3.0% higher than November 2004. Also interesting is it seems that builders are building at a slower rate than just 5 years ago as in 2004 a large scale project of 20 or more homes took an average of 1.9 months to build vs. the 1.2 months in 1999. Maybe this is done on purpose to try and pre-sell more of the units and cause a bidding war?