Single-family housing starts rose 3.9 percent to a seasonally adjusted annual rate of 430,000 units in October, according to newly released data from the U.S. Commerce Department. This improvement was somewhat masked by an 8.3 percent decline in multifamily starts that kept the combined number for nationwide housing production virtually flat at 628,000 units in October. Meanwhile, single-family permits also posted a measurable gain of 5.1 percent to 434,000 units in the latest report, which is their fastest pace since December 2010.
Permit issuance, an indicator of future building activity, rose 10.9 percent to a seasonally adjusted annual rate of 653,000 units in October on gains in both the single- and multifamily sides. Single-family housing permits rose 5.1 percent to 434,000 units – their highest level since December 2010 – while multifamily permits rose 24.4 percent to 219,000 units – their highest level since October 2008.
On a regional basis, combined permitting activity was down 1.6 percent in the Northeast and 3.7 percent in the Midwest, but up 21.5 percent in the South and 5.4 percent in the West.
“The government’s numbers for October housing production are very much in keeping with what home builders have been telling us in our recent surveys,” said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. “While we still have a long way to go toward a recovery, some signs of hope are emerging in certain markets where economic and job growth is occurring and where foreclosures have not been an overwhelming obstacle.”
“The three-month moving averages for both housing production and permitting activity have been gradually rising since this spring, which is consistent with our forecast for slow improvement in market conditions through the end of this year and a positive sign that a more solid recovery will begin to take hold in 2012,” said NAHB Chief Economist David Crowe. “That said, the improvements we are seeing are still limited to scattered local markets where economies are improving, and obstacles such as tight credit conditions for builders and buyers, appraisal issues stemming from new homes being compared to distressed properties, and consumer concerns about job security are definitely slowing the progression of both a housing and economic recovery.”
While combined housing starts in October declined by a barely perceptible 0.3 percent to a rate of 628,000 units, the single-family sector posted a 3.9 percent gain to 430,000 units. Meanwhile, the more volatile multifamily sector posted an 8.3 percent decline to 198,000 units following an unsustainably large gain in the previous month.
Combined starts activity was up in three out of four regions in October. Gains of 17.2 percent, 9.7 percent and 1.6 percent were registered in the Northeast, Midwest and South, respectively, while the West posted a 16.5 percent decline.