Housing starts show little movement in October
Housing starts demonstrated little movement in October as elevated mortgage rates continue to hold back home buyers.
Combined housing starts moved forward just 1.9% to a seasonally adjusted annual rate of 1.372 million from the revised September estimate of 1.346 million.
The latest data, released this morning by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, is 4.2% below the October 2022 rate of 1.555 million starts.
Single-family starts were nearly flat for the month, edging upward by just 0.2% to rate of 970,000 from the revised September rate of 968,000.
The October rate for units in buildings with five units or more was 382,000, a 4.2% increase above the prior month but a 31.8% drop compared to a year ago.
Year-to-date, single-family starts are down 10.6%. The multifamily sector, which includes apartment buildings and condos, is up 6.3% to an annualized 402,000 pace.
“Despite higher interest rates in October, the lack of existing home inventory supported demand for new construction in the fall,” said Alicia Huey, chairman of the National Association of Home Builders (NAHB) and a custom home builder and developer from Birmingham, Ala. “Builders continue to grapple with elevated construction costs and growing concerns about regulatory costs."
Overall permits increased 1.1% to a 1.49 million unit annualized rate in October. Single-family permits increased 0.5% to a 968,000 unit rate. However, single-family permits are down 10.6% year-to-date. Multifamily permits increased 2.2% to an annualized 519,000 pace.
“The construction data in October continue to reflect that despite multidecade lows for housing affordability, the market continues to lack attainable inventory that only the home building industry can provide,” said NAHB Chief Economist Robert Dietz. “And with the 10-year Treasury rate now back in the 4.5% range, we are forecasting gains for single-family home building in the months ahead and an outright gain for construction in 2024.”
Here’s how single-family starts and permits performed regionally on a month-over-month basis:
- In the Northeast, single-family starts move ahead 12% and are up 9.8% compared to a year ago. Permits were flat and fell 17.6% from a year ago.
- Single-family starts in the Midwest jumped by 28.4% are rose 5.2% compared to October 2022. Permits in the Midwest were also flat but are up 8.3% on a year-over-year basis.
- The South saw single-family starts decline 4.9% for the month but increased 9.1% on a year-over-year basis. Permits climbed by 2.5% in October but receded by 8% in comparison to October a year ago.
- Starts in the West 12.3% for the month and soared by 46% on a year-over-year basis. Permits are down 5.9% for the month but are 6.7% ahead on a year-over-year basis.
