Tie ‘Highest Level in 10 Years’
Home-building activity took off in October, with housing starts up 13.7 percent to a rate of 1,290,000, according to the latest data from the U.S. Census Bureau and the Department of Housing and Urban Development (HUD). Single-family housing starts increased 5.3 percent to 877,000. Starts for units in buildings with five units or more came in at 393,000.
Permits also increased, 5.9 percent from September to 1,297,000, according to the data. Single-family permits were up 1.9 percent to 839,000. Permits for units in buildings with five units or more came in at 416,000.
Completions totaled 1,232,000 in October, rising 12.6 percent. Single-family completions increased 2.6 percent from September to 793,000. Completions for units in buildings with five units or more came in at 433,000.
“Single-family housing starts tied the highest level we’ve seen in 10 years,” says Danielle Hale, chief economist at realtor.com®. “While the recession started roughly 10 years ago, a return to this level of single-family construction is no cause for alarm for two major reasons: the market has completely different underlying economics now, and housing starts in October 2007 had already declined by half from their peak levels in early 2006.”
“Even more encouraging than the above estimated housing starts rate is the pickup in permit applications for single-family dwellings, indicating that we should see more new construction in the coming months,” says Bill Banfield, executive vice president of Capital Markets for Quicken Loans. “Despite monthly fluctuations, generally low mortgage rates also signal home-building activity across the country can be expected to grow steadily.”
“Single-family permits, a reasonable indicator of future construction conditions, are running 10 percent higher on a year-to-date basis,” wrote Robert Dietz, chief economist of the National Association of Home Builders (NAHB), in the NAHB Eye on Housing blog. “Part of the gain for single-family construction in October was a rebound in Florida and Texas after project delays in September.”
“The South region is quickly getting back on its feet with a big jump in new housing starts, after a pause in the prior month from the aftermath of the hurricanes,” said Lawrence Yun, chief economist of the National Association of REALTORS® (NAR), in a statement. “The Midwest and the Northeast regions also made gains. Only the West region, the very region that is most in need of new supply, experienced fewer housing starts.
“Overall, the total activity for the country is moving in the right path,” Yun said. “More supply will boost future home sales. The West region, however, could experience slowing job growth as affordability conditions worsen from the ongoing inventory shortages that are driving up prices. This could ultimately force residents and potential job seekers to start looking to other parts of the country.”
Source: U.S. Census Bureau
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