Increase In Multifamily Construction Lifts Total Housing Starts In October

RISMEDIA, Nov. 23, 2007-A bounce-back in the volatile multifamily market lifted total housing starts 3.0% in October to a seasonally adjusted annual rate of 1.229 million units as the downswing in the single-family housing market continued, according to figures released by the Commerce Department this week. Total starts were down 16.4% from a year earlier.

Single-family housing starts dropped 7.3% for the month to a seasonally adjusted annual rate of 884,000 units, the lowest monthly production rate since October 1991 and 25.1% below October 2006.

“Builders continue to do what they absolutely have to do in this market downturn. They are repositioning themselves for the market’s eventual recovery by cutting back on production and working down their inventories,” said Brian Catalde, president of the National Association of Home Builders (NAHB) and a home builder from El Segundo, Calif.

“The large October bounce-back in multifamily starts reflected typical month-to-month volatility, while the pattern of multifamily permits shows that this sector is gradually losing momentum,” said NAHB Chief Economist David Seiders. “The large declines in single-family starts and permits clearly show that this component of the housing market still is weakening seriously.”

Multifamily housing starts rose 44.4% to a seasonally adjusted annual rate of 345,000 units in October after dropping 35.9% to a 239,000-unit pace the month before. The pace of multifamily construction was 19.4% above October 2006.

In another indication that builders are repositioning themselves, total building permits were down 6.6% in October to a seasonally adjusted annual pace of 1.178 million units. Total permits were down 24.5% from a year earlier.

Single-family permit issuance was down 8.0% to a pace of 807,000 units for the month, the lowest pace since November 1991 and 31.0% below October 2006.

The rate of multifamily permit issuance was down 3.4% to 371,000 units for the month. The pace was 4.9% below a year earlier.

Regionally, starts of new homes and apartments were up in the Northeast, Midwest and West by 8.5%, 21.1% and 5.8%, respectively. Housing starts were down in the South by 4.6%.

For more information, visit www.nahb.org.