Housing starts and permits rose in October, but at a pace that was “below trend,” according to Yahoo Finance.
What’s going on: “New residential construction, including single-family and multifamily homes, increased 1.9% in October from the month before to 1.372 million units on a seasonally adjusted basis, according to data from the Census Bureau released Friday. While that’s down 4.2% versus the previous year, it’s above the forecast of 1.350 million units from economists surveyed by Bloomberg.”
- Residential permits, a gauge of future homebuilding, rose 1.1% in October, to 1.487 million units from September’s 1.471 million units.
- Despite the increase, both permitting activity and home building are lower than they typically are, one source told the news outlet.
Multifamily construction: Multifamily starts were at 382,000 in October, down slightly from 383,000 units in September.
- Meanwhile, “[p]ermits to start construction on multifamily structures with five or more units landed at 469,000 units in October, just 2% higher than the previous month of 459,000 units.”
- Weaker multifamily construction has “slowed down rent growth nationwide.”
Single-family homes: October construction starts for single-family homes rose 0.2% in October, to 970,000 from a revised September reading of 968,000.
Our take: “This data provides some encouragement in the housing market that has been rocked by sharply higher mortgage rates, which have dampened demand,” said NAM Chief Economist Chad Moutray. “Indeed, builder sentiment reflects the negative outlook seen in the sector. Yet, interest rates have drifted lower in recent weeks, perhaps providing a respite and some hope for improvements in demand moving forward.”