Nationwide housing starts declined 11.7% to a seasonally adjusted annual rate of 519,000 units in October, according to figures released by the U.S. Commerce Department today. The decline was primarily registered in the more volatile multi-family sector, where starts retreated 43.5% to an 83,000-unit rate, while single-family starts posted a more modest 1.1% decline to 436,000 units.
"Home builders continue to be very cautious about starting new projects at this time," said Bob Jones, chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich. "That said, in markets where consumer demand for new homes is reviving, builders are finding it almost impossible to obtain construction financing, and this frustrating situation is producing an unnecessary drag on both new-home production and economic growth."
"October single-family starts and permitting activity remained essentially in line with the third quarter's trend," noted NAHB chief economist David Crowe. "What this tells us is that the market is running at a steady, but slow rate following the downturn that took place upon expiration of the home buyer tax credit program and the economic slowdown this summer. Today, builders are just starting to report some improvement in buyer demand, which should gradually translate into more sales activity, and more starts, as the economy strengthens. The great concern is that this positive momentum will be stifled due to builders' inability to obtain financing for new construction at a time when inventories of completed new homes are very thin."