Housing starts neared their postrecession high in October, with expectations that the new-home market will soon provide much-needed inventory relief, the Commerce Department reports.
Starts, which reflect combined totals within the single-family and multifamily sectors, jumped 13.7 percent in October to a seasonally adjusted annual rate of 1.29 million. That’s the highest reading for new-home production since October 2016, when starts had reached a postrecession high of 1.33 million.
Starts for single-family homes in October increased 5.3 percent last month, reaching a seasonally adjusted annual rate of 877,000. They are now up 8.4 percent from a year ago. Multifamily starts surged nearly 37 percent, reaching 413,000 units in October after a weak September production report.
“We are seeing solid, steady [new-home] production growth,” says Robert Dietz, chief economist of the National Association of Home Builders. “As the job market and overall economy continue to firm, we should see demand for housing increase as we head into 2018.”
Combined housing starts posted the largest upswing in the Northeast, where they increased 42.2 percent month over month. Housing starts also posted strong increases in the Midwest (18.4 percent) and the South (17.2 percent), but they dropped 3.7 percent in the West. However, building permits—a gauge of future production—rose in all four regions of the U.S. in October. Permits rose 13 percent in the West, 4.1 percent in the Northeast, 3.8 percent in the Midwest, and 3 percent in the South.
Source: National Association of Home Builders
