Solid housing starts and permits for October

Low mortgage rates resulted in plenty of optimism for the housing market as residential construction and permits demonstrated strength for October.

Housing starts in October increased 3.8 % to a seasonally adjusted annual rate of 1.314 million from the revised September rate of 1.266 million, according to the latest report from the Commerce Department.

This is 8.5% above the revised October 2018 rate of 1.211 million.

Single-family starts increased by 2.0% to 936,000 above the revised September rate of 918,000.

Regionally, total starts dropped 21.9% in the Northeast as single-family starts plummeted 32.8%. In the Midwest, starts increased 8.7% as single-family starts increased 0.8%. Starts in the South grew 0.7% while single-family starts are 3.2%. Total starts in the West jumped 17.6% while single-family starts ascended 9.3%.

Total housing permits for October increased by 5.0% to a seasonally adjusted rate of 1.461 million from the revised September rate of 1.391 million. Permits are also 14.1% above the October 2018 rate of 1.281 million.

Single-family permits increased 3.2% to 909,000 from the revised September figure of 881,000. Permits for structures with 2-4 units soared 38.2% in October while permits for buildings with 5 or more units increased 6.1%, compared to September.

By region, total permits in the Northeast 19.5% while single-family permits grew 6.5%. In the Midwest, permits are 1.7% but single-family permits fell 4.0%.

In the South, total permits are up 5.6% while single-family permits increased 2.8%. In the West, total permits edged upward 0.8% as single-family permits climbed 7.8%.

The full October 2019 New Residential Construction Report can be accessed here.

Commenting on the latest report, National Association of Home Builders (NAHB) Chairman Greg Ugalde said, “Home builders are seeing more building opportunities as market conditions remain solid.”

Also a developer in Torrington, Conn., Ugalde added, “Builder sentiment remains strong, and we are seeing an uptick in buyer traffic.”

The latest NAHB/Wells Fargo Housing Market Index, released yesterday, shows that builder confidence remains on steady ground.

“Led by lower mortgage rates, the pace of single-family permits has been increasing since April, and the rate of single-family starts has grown since May,” said NAHB Chief Economist Robert Dietz. “Solid wage growth, healthy employment gains and an increase in household formations are also contributing to the steady rise in home production.”