A jump in apartment construction projects in November boosted the tight supply of homes in the booming US real estate market, according to government data released Thursday.

With borrowing rates at record lows during the Covid-19 pandemic, home sales have been one of the bright spots in the US economy, pushing prices higher and challenging builders to keep up with demand.

Total housing starts rose 1.2 percent compared to October to a 1.55 million seasonally-adjusted annual rate, the Commerce Department reported.

That was slightly better than economists had expected, and a solid result heading into winter when construction usually slows.

A jump in building starts for apartments was a good sign for the tight inventories of the US housing market
A jump in building starts for apartments was a good sign for the tight inventories of the US housing market GETTY IMAGES NORTH AMERICA / AL BELLO

Building initiated on multi-family units jumped eight percent, while single-family starts rose just 0.4 percent, according to the report.

Ian Shepherdson of Pantheon Macroeconomics said the total increase was a slight disappointment, but the 6.2 percent surge in building permits -- also concentrated in apartment buildings -- points to another increase in December, and a jump in home sales in the spring.

"All these numbers -- but especially starts -- are erratic from month-to-month, but the key point here is that construction activity has not yet fully caught up with the surge in housing activity, leaving room for modest further gains," he said in an analysis.

Housing starts in the Northeast more than doubled last month, while activity fell in the South and Midwest, according to the report.

Coronavirus