Housing starts climb in October
The housing market continues to show strong gains in 2020.
Housing starts in October were at a seasonally adjusted annual rate of 1.53 million, which is 4.9% above the revised September estimate of 1.459 million, according to the Monthly New Residential Construction report released today by the U.S. Census Bureau and the Department of Housing and Urban Development.
The latest figures are also a 14.2% climb from a rate of 1.34 million in October 2019.
Single-family housing starts increased 6.4% from the revised September rate of 1.108 million. The pace of single-family starts in October was the highest production rate since the spring of 2007, according to the National Association of Home Builders.
The October rate for units in buildings with five units or more was 334,000.
This report follows yesterday’s news of builder sentiment reaching a new high. Builder confidence in the market for newly-built single-family homes increased five points to 90 in November, blowing well past the previous all-time high of 85 recorded in October, according to the latest NAHB/Wells Fargo Housing Market Index (HMI).
A combination of historically low mortgage rates, favorable demographics, and the ongoing suburban shift for home buyer preferences have fired-up demand and increased new home sales.
Housing permits were flat in October, however. Authorizations were at a seasonally adjusted annual rate of 1.545 million last month compared to the revised September rate of 1.544 million. The latest permits report is 2.8% above the October 2019 rate of 1.503 million.
Single-family authorizations in October increased just 0.6% to 1.12 million from the revised September rate of 1.113 million.
Here's how October's total starts and single-family starts, along with permit data, break down on a regional basis.
- In the Northeast, total starts dropped 38.6% while single-family starts decreased 17.9%. On a year-over-year basis, starts are down 32.8% but single-family starts have soared 41%. Total permits jumped 23.5% while single-family permits remained flat in October. Permits year-over-year have increased 23.5% while single-family permits have leaped 66.7%.
- In the Midwest, total starts rose 3.3% as single-family starts increased 22%. On a year-over-year basis, total starts are up 23% as single-family starts have grown by 33.6%. Total permits are up 2.9% as single-family permits edged upwards by just 0.7%. Year-over-year, total permits have risen 16.9% while single-family permits are now 19.8% ahead of last year.
- In the South, total starts increased 12.9% as single-family starts ascended by 6.9%. On a year-over-year basis, total starts have jumped 33.6% as single-family starts climbed 24.3%. Total permits grew just 0.7% as single-family permits increased 2.2%. Year-over-year, total permits have increased by 3.9% while single-family starts have jumped 21.2%.
- In the West, total starts rose 4.4% as single-family starts increased 4.4%. Year-over, total starts are 5.4% ahead of last year while single-family have jumped 28.1%. Total permits were nearly flat, inching upward by 0.5% as single-family starts moved ahead just 0.4%. Overall permits on year-over-year basis moved up by 0.5% as single-family permits leaped 19.5%.
The full Monthly New Residential Construction report for October 2020 is available here.