Construction up in November

WASHINGTON -- Home builders last month broke ground on the largest number of projects since July. Low mortgage rates and mild weather helped the housing market remain a bright spot in the gloomy economy.

The Commerce Department reported Tuesday that housing construction rose to a seasonally adjusted annual rate of 1.65 million housing units in November, an 8.2 percent increase over the prior month.

On Wall Street, the news gave stocks a big boost and fueled investors' hopes that the economy is improving. The Dow Jones industrial average closed up 106.42 points at 9,998.39.

The 8.2 percent increase marked the biggest one-month gain since January and pushed housing starts to the highest level since July, when they grew to a rate of 1.66 million units.

November's rebound came after housing starts fell by a revised 4 percent in October, a larger drop than the government previously reported.

The stronger than expected performance last month occurred even as consumer confidence fell to a 7 1/2-year low in November and the employment picture worsened. The nation's unemployment rate climbed from 5.4 percent to 5.7 percent and payrolls fell sharply.

Low rates key

Low mortgage rates are a key reason that the housing and construction markets have remained stable even as the national economy has been suffering through a recession since March.

The average interest rate on a 30-year fixed-rate mortgage was 6.7 percent in November, compared with 7.7 percent for the same month a year ago.