U.S. housing starts increase; permits hit 12-1/2-year high

U.S. homebuilding increased more than expected in November and permits for future home construction surged to a 12-1/2-year high as lower mortgage rates continue to boost the housing market and support the broader economy. The report from the Commerce Department on Tuesday also showed the stock of homes under construction last month was the highest since 2007, which could help to loosen a supply squeeze that has stalked the housing market. Though housing accounts for a only fraction of gross domestic product, it has a bigger economic footprint. The continued strength in housing activity suggested the economy remains on a moderate growth path despite slowing consumer spending and a weak manufacturing sector.