Single-Family Construction Continues to Make Steady Gains in October

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Total housing starts increased 3.8 percent in October to a seasonally adjusted annual rate of 1.31 million units, according to a report from the U.S. Housing and Urban Development and Commerce Department. The October reading of 1.31 million starts is the number of housing units builders would begin if they kept this pace for the next 12 months. Within this overall number, single-family starts increased 2% to 936,000 units. The multifamily sector, which includes apartment buildings and condos, increased 8.6% to a 378,000 pace. "Home builders are seeing more building opportunities as market conditions remain solid," said NAHB Chairman Greg Ugalde. "Builder sentiment remains strong and we are seeing an uptick in buyer traffic." “Led by lower mortgage rates, the pace of single-family permits has been increasing since April, and the rate of single-family starts has grown since May," said NAHB Chief Economist Robert Dietz. "Solid wage growth, healthy employment gains and an increase in household formations are also contributing to the steady rise in home production." On a regional and year-to-date basis, combined single-family and multifamily starts in October are 6.8% higher in the South. Starts are down 0.5% in the Northeast, 7.4% in the Midwest and 10.3% in the West. Overall permits, which are a harbinger of future housing production, increased 5% to a 1.46 million unit annualized rate in October. Single-family permits rose 3.2% to a 909,000 rate while multifamily permits increased 8.2% to a 552,000 pace. Looking at regional permit data on a year-to-date basis, permits are 9.2% higher in the Northeast and 5.2% in the South. Permits are down 5% in the Midwest and 1.4% in the West. NAHB Chief Economist Robert Dietz provides more analysis in this Eye on Housing blog post.

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