Housing construction bounds back

U.S. home construction rebounded in December to cap the best year since 1978 as cheap mortgages and increased employment buoyed demand, the Commerce Department said.

Housing starts last month rose 11%, the biggest increase in more than seven years, to 2.004 million units at an annual rate after sinking to a 1.807-million pace in November. Starts for all of 2004 totaled 1.953 million, up 5.7% from 2003.

Building permits, an indicator of future construction, slipped 0.3% to 2.021 million at an annual rate. December was the third straight month in which permits exceeded 2 million.