Building permits eased by 3.1 percent in November from the prior month to a 1.01 million rate, Commerce Department data showed last week. October’s 1.04 million level was the highest since June 2008.
Homebuilders such as Los Angeles-based KB Home see a rise in interest rates as a short-term “pause” for buyer demand that won’t prevent an acceleration in the housing recovery next year, Chief Executive Officer Jeffrey Mezger said on a Dec. 19 earnings call.
Personal Spending
Retailer discounting is also brightening consumers’ moods and translating into more demand. Commerce Department data show personal spending increased 0.5 percent last month after a 0.4 percent gain in October that was larger than previously estimated.
Car dealers have also seen increased demand. Auto sales climbed to a 16.3 million annualized rate in November, the highest since May 2007, according to data from Ward’s Automotive Group.
The pickup in the economy helps explain why Federal Reserve officials last week decided to trim monthly bond purchases to $75 billion from $85 billion starting in January. It marked the first step toward unwinding the unprecedented stimulus that Chairman Ben S. Bernanke put in place to help the economy recover from the worst recession since the 1930s.
Policy makers also said the target for the benchmark interest rate will probably remain near zero “well past” the time the jobless rate reaches 6.5 percent.