Construction of new homes rose in November while applications for building permits rose to the highest level in 12 years.

Both gains were seen as encouraging signs of a rebound in the housing market.

The Commerce Department says builders started construction on a seasonally adjusted annual rate of 1.37 million homes in November, an increase of 3.2% from October.

Applications for building permits increased 1.4% last month to a seasonally adjusted rate of 1.48 million.

That was the highest level for building permits since May 2007.

Housing has been on a rebound for the past several months, helped by moves by the Federal Reserve to cut interest rates.

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