Washington, DC, Jan. 5--Construction spending boomed more than expected in November to a fresh record high, a government report showed on Monday as persistently low mortgage interest rates spurred an unprecedented rate of building.
Overall construction spending jumped 1.2 percent to a seasonally adjusted annual rate of $934.5 billion in the month from an upwardly revised $923.8 billion in October, the Commerce Department said. Analysts polled by Reuters were expecting a 0.5 percent increase.
It was the fifth month in a row in which total construction spending reached an unprecedented high. Total private construction, total public construction, private residential construction and state and local construction all climbed to fresh records.
Private residential construction spending rose 2 percent to $495.7 billion from $486.2 billion.
Interest rates on the popular 30-year fixed rate mortgage rose to 5.85 percent last week according to mortgage finance company Freddie Mac, but were not much above 40-year lows plumbed in June. A Freddie Mac economist said home buyers are increasingly turning to adjustable-rate mortgages in search of lower interest rates.
At the same time, sales of new homes and home resales fell in November, a sign of a maturing housing market, according to analysts.
