Nationwide housing starts plunged 11 percent in October month-over-month, reaching a seasonally adjusted annual rate of 1.06 million units last month, according to the Commerce Department. Multifamily starts attributed to most of that decline, falling 25.1 percent month-over-month while single-family production was down just 2.4 percent. Both sectors, however, posted permit gains, signaling a slight pick up is likely in the months ahead.
“This month’s decline can be attributable to the volatile multifamily sector adjusting to trend after an unusually high September, as well as the storms and flooding affecting single-family production in the South,” says David Crowe, chief economist of the National Association of Home Builders. “However, with permits ticking upward, we expect to see the housing market continue to grow at a modest pace.”
Regionally, combined single and multifamily housing starts rose by the largest amount in the Midwest, posting a 15 percent month-over-month gain. The Northeast also posted an increase in starts by 10.2 percent. Meanwhile, housing starts fell 18.6 percent in the South and by 16.2 percent in the West last month.
Nationally, permits were on the rise, increasing 4.1 percent in October compared to September and reaching 1.15 million units last month. Multifamily permits are up 6.8 percent while single-family permits increased 2.4 percent. Permits posted the highest gains in the South (up 7.5%), followed by the Northeast (up 5.9%) and the Midwest (up 2.4%). Permits dropped last month by 2.6 percent in the West.
“The fact that permits are rising is consistent with our builders’ continued optimism in the housing market,” says Tom Woods, chairman of the National Association of Home Builders. “Even though starts dropped in October, they have stayed above the one million mark for seven straight months — the longest streak in almost seven years.”