Housing Starts Explode to 9-Year High

News

Housing permits improved for the second straight month
in October but housing starts skyrocketed, rising 25.5 percent above September’s
level to a seasonally adjusted annual rate of 1,323,000 units.  The increase came on the heels of a 9 percent
downturn in September when a 39 percent drop in multi-family starts offset what
was an otherwise encouraging gain in the single-family sector.  That original estimate was revised slightly higher
in today’s report from the U.S. Census Bureau and Department of Housing and
Urban Development, rising from 1,047,000 units to 1,054,000.  October’s gain put housing starts on a pace
23.3 percent above that of October 2015.

The improvement in housing starts was broad
based.
  All four regions of the country
posted double digit percentage gains.

The October surge was not a total surprise but still
outpaced expectations.  Analysts surveyed
by Econoday had been looking for an increase of 11.6 percent to a rate of 1,168,000
units.  The actual number was well above
even the high point of estimates which ranged from 1,111,000 to 1,210,000.

Single family housing starts rose 10.7 percent
month-over-month to a seasonally adjusted rate of 869,000, 21.7 percent above
the rate a year earlier.  September
housing starts were revised from 783,000 to 785,000. 

September’s dreadful multi-family numbers did not
change much on revision, rising from 250,000 units to 255,000, but starts in
October more than compensated, gaining 74.5 percent to 445,000 units, 28.2
percent higher than the October 2015 rate.

On an unadjusted basis, there were 114,900 housing
units started in October compared to 94,800 in September, with 73,500 of the
starts single-family units, up from 67,700. 
Multi-family starts increased by 15,000 to 40,500.

Housing permits, which had lagged in late summer, improved
slightly on September’s 6.3 percent gain, rising 0.3 percent to an annual rate
of 1,229,000 units from 1,225,000 in September. 
This was up 4.6 percent from the October 2015 estimate of 1,175,000
units.

Single family permits were at a seasonally adjusted
rate of 762,000, a 2.7 percent change from September’s 742,000 (revised from
739,000) figure and 5.1 percent higher than the prior October.  Multi-family permits fell 1.8 percent to
439,000 units, 5.8 percent above the October 2015 pace.

Analysts had expected permits to drop 2.9 percent to
1,190,000 units.  The range of estimates
gathered by Econoday was 1,170,000 to 1,210,000 units.

On an unadjusted basis, there were 97.900 housing
permits authorized in October, down from 107,700 in September.  Single-family permits numbered 60,500, down
from 63,300.

Housing units were completed during the month at a
seasonally adjusted annual rate of 1,055,000 units, 749,000 of which were
single-family.  The total is a gain of
5.5 percent from September completions that were at the rate of 1,000,000 and
7.2 percent higher on an annual basis. 
The single-family completion rate was 3.9 percent higher
month-over-month and 17.0 percent year-over-year.  The rate of completions of multi-family units
was 300,000 units, up 12.8 percent from September but 10.4 percent below the
previous October.

There were 1,059,400 housing units under construction
at the end of October, a non-seasonally adjusted number.  Of that number 451,900 were single-family
units.  Permits had been issued for
125,700 housing units for which construction had not yet begun by month end;
63,800 were for single family units.

Housing permits in the Northeast plunged 21.1 percent
from September levels and were down 19.2 percent year-over-year. The region,
however, shared the jump in housing starts, up 44.8 percent for the month and
2.2 percent compared to the same month in 2015. The completion rate was down
19.6 percent and 32.8 percent from the earlier periods.

In the Midwest permits were up 12.1 percent for the
month, and were running 15.9 percent above October 2015.  Housing starts jumped 44.1 percent and 24.4
percent compared to the earlier periods. 
Completions rose 54.5 percent from September and 21.4 percent from the
same month in 2015.

Permitting in the South fell off by 2.4 percent from
the September pace and were down 4.2 percent from a year earlier, but starts
were up significantly, rising 17.9 percent and 20.4 percent respectively. The
completion rate was up 2.1 percent for the month and 10.1 percent annually.

The West remained strong; permits rose 7.5 percent
compared to September and 28.4 percent year-over-year and starts were up by
23.2 percent and 40.2 percent.  Completions
fell slightly from September, 1.2 percent, but remained 11.9 percent ahead of a
year earlier.

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