Ford Smith works on a home under construction in Chicago in October. (Nam Y. Huh / Associated Press )
WASHINGTON -- Fueled by more home building, construction spending increased 1.4% in October from the previous month and rose to its highest annual rate in more than three years, the Commerce Department said Monday.
Builders spent at a seasonally adjusted rate of $872.1 billion in October, up from a revised $860.4 billion in September. Year-over-year, spending in October increased 9.6%.
The new figures greatly exceeded analysts' expectations. The median projection by economists surveyed by Bloomberg was for spending to rise 0.5% in October.
The new government data came after Irvine research firm CoreLogic reported Monday that the number of completed foreclosures and homes in the foreclosure process dropped in October.
The two reports provided more evidence that a strong housing sector rebound continued to take hold through October.
The pace of construction spending was the highest since September 2009 but still lagged below the annual rate of about $1.1 trillion that the nation saw during the height of the housing boom in 2006 and 2007.
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Private construction spending rose 1.6% in October from the previous month, led by a 3% surge in home building.
Public construction spending lagged the private sector amid budget crunches at all levels of government. Such spending, which includes roads and other infrastructure projects, was up 0.8% in October from the previous month.
New home sales dipped 0.3% in October
Foreclosures down in October as housing market continues healing
Manufacturing sector slips in November; Superstorm Sandy to blame?
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