For the fifth consecutive month, builders increased spending in December, the Commerce Department said today. The figures tempered yesterday's news that home prices in most markets tracked by the S&P/Case-Shiller index had slipped 1.3 percent in November.
As the AP puts it, the 1.5 percent increase from November "pushed spending to a seasonally adjusted annual rate of $816.4 billion, the highest level in 20 months" and ended the weak construction year on a hopeful note.
Bloomberg explains:
"The median estimate of 51 economists in a Bloomberg survey called for a 0.5 percent rise.
"A housing market that is gaining some steam as builders begin apartment projects may breathe life into the industry that's struggled since triggering the recession in 2007. At the same time, decreased spending by the government may temper progress in construction as a whole.
"'There are certainly bright spots for the construction outlook,' Michelle Meyer, a senior U.S. economist at Bank of America Corp. in New York, said before the report. 'Multifamily construction will continue to improve given the ongoing shift from owning to renting and the lack of supply in the market. It will still be a very slow healing process.'
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