Building pace picking up

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Friday, Jan. 3, 2003 | 9:53 a.m.

WASHINGTON -- U.S. construction spending rose more than expected in November, the third straight increase, as the lowest mortgage rates in more than three decades fueled demand for new houses, government figures showed.

Spending increased 0.3 percent to $843.2 billion after rising a revised 1 percent in October, the Commerce Department said today. The November figure was the highest since May.

Record sales of new homes last year contributed to higher profits at homebuilders such as Toll Brothers Inc. and helped to support the economy's recovery at a time when companies were slow to build new offices, factories and warehouses.

"Affordability continues to be strong because interest rates are very low," said Gary Reece, chief financial officer of M.D.C. Holdings Inc.