Home Construction Up in November

The pace of home and apartment building in the United States rebounded in November after falling the previous month, as low mortgage rates continued to boost the housing business and the nation’s fragile economy, according to government figures released Tuesday.

Construction activity would have been even stronger if not for a significant decline in the West, where the relatively strong California real estate market was not enough to offset weakness in the rest of the region, analysts said.

Nationwide, housing starts in November rose 2.4% from October’s revised figure, to an annualized rate of 1.697 million units, according to the Commerce Department. During the previous month new home construction fell by 8.4%.

The report showed that housing activity strengthened in every part of the country except for the Northeast -- down 5.6% -- and the West, where construction starts fell 11.9%.

Although individual state data were not available, analysts said it was unlikely that California contributed to that decline. And separate data of home-building permits from the state show that residential construction in California seems to be doing much better than the rest of the West.

Jeff Meyers of Meyers Group, a real estate industry research firm, said that Southern California in particular was holding up well. Many urban areas of California continue to face a housing shortage, which will continue to spur demand for construction. In terms of home sales activity, Meyers said, “the best market in the country is the Inland Empire.”

Reflecting another Southern California market where housing demand has been strong, developer Newhall Land & Farming Co. on Tuesday raised its projected net income for the year by about 8%. The company said that was partly because it has sold a record 1,269 residential lots in the Santa Clarita Valley this year.

“There is still strong, deep-down, pent-up demand for housing in California,” said regional economist Steven Cochrane at Economy.com. “There really is no housing shortage” in many other Western cities.

Indeed, analysts viewed the Western region’s drop in construction starts last month as a sign that builders are reacting to a moderation in home prices and sales activity in once-booming states such as Arizona, Colorado and Washington.

For the nation as a whole, however, economists said the November report shows that the housing industry continues to be strong.

“It remains a positive for the economy,” said Mary Daly, an economist at the Federal Reserve Bank of San Francisco.

Home builders have remained upbeat even as the pace of construction is projected to slow next year. The National Assn. of Home Builders’ housing market index, a measure of home builder confidence, rose one point in December to 65 -- the highest level since November 2000.