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US home construction rose 1.5 percent in October

By JOSH BOAK
AP Economics Writer

WASHINGTON (AP) — The number of homes being built in the U.S. increased by a slight 1.5 percent in October, but in a troubling sign, groundbreakings for single-family houses became less common.

The Commerce Department said on Tuesday housing starts rose to a seasonally adjusted annual rate of 1.23 million, up from 1.21 million in September. The gains came entirely from apartments. The number of starts for single-family houses slipped by 1.8 percent last month.

The housing market has stumbled in recent months as mortgage rates have climbed, putting the ability to buy a home or move up to a nicer property out of reach for more Americans. A sharp increase in mortgage rates has led to a marked decline in home construction since May, and the number of groundbreakings taking place has fallen by 2.6 percent in the past 12 months.

The average 30-year fixed-rate mortgage has gone up a full percentage point in the past year, reaching 4.94 percent, according to the mortgage buyer Freddie Mac. This benchmark rate is at its highest average since February 2011.

The number of permits being issued, an indicator of future activity, declined by 0.6 percent to hit an annual rate of 1.26 million.

This pullback in construction has occurred as sales of new homes have begun to stall.

The number of new homes being bought has plummeted in the past four months, showing a drop of 5.5 percent in September, according to a Commerce Department report last month. The annual rate of home sales has declined by 15.3 percent since May, marking a striking reversal from the increase seen during the first five months of 2018.

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