US construction spending jumped an unexpected 0.9 per cent in October to set a new record for a fourth straight month as low mortgage interest rates pushed home-building to unprecedented levels, the government said today.
Overall construction spending rose to a seasonally adjusted annual rate of $922 billion in the month from an upwardly revised $913.5 billion in September, the US Commerce Department said.
Private residential construction spending rose 2.2 per cent to $484.1 billion from $473.6 billion, a record high. But private non-residential construction fell 2.1 per cent, the biggest slide since a 2.3 tumble in December of last year, on declines in building of commercial facilities, power plants and factories.
Low mortgage rates and strong demand have fueled a multi-year housing boom even as the broader economy struggled to find its feet after the 2001 recession.
While home mortgage rates have drifted above four-decade lows set earlier this year, they remain at relatively low levels. According to housing finance giant Freddie Mac, the average rate on a 30-year fixed-rate loan was 5.95 per cent in October, down from 6.15 per cent in September.