Housing starts rose 9 percent in November to an annual rate of 1.12 million units, but economists said this week the nation's beleaguered housing industry has not recovered from its slump.
The Commerce Department reported November's housing starts topped last month's revised rate of 1.03 million.
"It's nice to see the rebound and nice to see a positive number, but I don't think this is the beginning of a recovery. We'll have to wait a little longer for that," said Thomas Holloway, senior economist for the Mortgage Bankers Association of America.
November's pace was 16 percent below the year-earlier rate of 1.34 million units, the report said.
During the first 11 months of the year, overall housing starts of 1.13 million were down 13 percent from 1.30 million in 1989.
The number of building permits, an indication of future building activity, also slipped in November to an annual rate of 907,000, down from 920,000 in October and 34 percent from November 1989.
So far this year, 1.05 million building permits have been issued, down 16 percent from 1.24 million issued for the same period last year.
Holloway said he expects that either November's housing numbers will be revised this month, or the levels of December starts will drop. Still, he expects the housing market to recover by late spring.
The forecast released this week coincides with his prediction that the recession will ease by the end of the first quarter.
John Tuccillo, chief economist for the National Association of Realtors, discounted November's gain because of what he called artificially depressed housing levels in October.
Increased multifamily housing, bolstered by declining interest rates and unusually mild weather in the South, accounted for most of the gain.
But serious signs of weakness continued in the single-family housing market, where starts were down 10 percent last month to 772,000 from 856,000 in October.
November's rate of single-family housing starts was the lowest since the last recession when starts fell to an annual rate of 773,700 in October 1982.
Building permits for single-family housing, a sign of future construction activity, were issued at an annual rate of 673,000 in November, down 5 percent from the month before.
"The declines in single-family starts and permits suggest we haven't hit bottom yet, and there may be further deterioration in the coming months," Tuccillo said.
"We expect, however, that overall housing construction has gone as far down as it will go during this cycle," he said.
The November starts rate for buildings with five units or more was 314,000, about twice the October amount. Starts of buildings with two to four units totaled 43,000.
Permits for buildings with five units or more were issued at a rate of 194,000 last month, up 15 percent from October.
Overall housing starts are expected to reach 1.2 million units this year, down 12.9 percent from last year, Tuccillo said.