The U.S. Census Bureau and the Department of Housing and Urban Development jointly announced the following new residential construction statistics for October 2015:
Privately-owned housing starts in October were at a seasonally adjusted annual rate of 1,060,000. This is 11.0 percent (±13.5%)* below the revised September estimate of 1,191,000 and is 1.8 percent (±11.2%)* below the October 2014 rate of 1,079,000.
Single-family housing starts in October were at a rate of 722,000; this is 2.4 percent (±9.9%)* below the revised September figure of 740,000. The October rate for units in buildings with five units or more was 327,000.
Building Permits
Privately-owned housing units authorized by building permits in October were at a seasonally adjusted annual rate of 1,150,000. This is 4.1 percent (±1.5%) above the revised September rate of 1,105,000 and is 2.7 percent (±2.2%) above the October 2014 estimate of 1,120,000.
Single-family authorizations in October were at a rate of 711,000; this is 2.4 percent (±1.5%) above the revised September figure of 694,000. Authorizations of units in buildings with five units or more were at a rate of 405,000 in October.
Housing Completions
Privately-owned housing completions in October were at a seasonally adjusted annual rate of 965,000. This is 6.0 percent (±15.8%)* below the revised September estimate of 1,027,000, but is 5.2 percent (±12.1%)* above the October 2014 rate of 917,000.
Single-family housing completions in October were at a rate of 640,000; this is 0.5 percent (±13.3%)* below the revised September rate of 643,000. The October rate for units in buildings with five units or more was 318,000.
“I wouldn’t look too much into October’s dip in housing starts, as we continue to remain above 1 million units, said Bill Banfield, Vice President of Quicken Loans. “We should focus on the positives, such as the rise in building permits. Ups and downs aside, we continue to feel optimistic about the sustainability of the housing market.”
Today’s housing starts report showed a larger decrease than expected, but the monthly change and year-over-year changes were not outside confidence intervals, and pointed to a slowdown in multifamily. Single-family permits came in at 711,000, up 9 percent over last October and the highest level since 2007, when the market was moving in the opposite direction.
“We need stronger growth than this,” said realtor.com Chief Economist Jonathan Smoke. “At our current pace of activity and taking into account loss of housing stock due to disaster and dilapidation, we’re building new units at less than half the pace at which we are forming households. The housing shortage only worsens if this remains the picture. Tight supply of homes for sale and low vacancies will continue to be the norm, and along with that, higher rents and prices.”
He continued: “Today’s report signals more strength than last month’s as the level of permits is higher than starts (1.15 million vs. 1.06 million). Permits by definition lead starts, so the pace of permit activity slowing to a level lower than the pace of starts signals a declining market. The decline in starts and completions this month is the result of that scenario last month.
“What we are likely seeing is a slowdown in multifamily homes, and continued growth in single-family. The multifamily component is the noisiest part of the new construction data, which means that we need more data to confirm this pattern.”
For more information visit http://census.gov/starts.
