Housing starts dipped 2.8% in October compared to September to reach a seasonally adjusted annual rate of 1,009,000 units – but unlike previous months, starts of single-family units were up while starts of multifamily units were significantly down, according to the U.S. Census Bureau and the Department of Housing and Urban Development.
Starts of single-family units were at a rate of 696,000 in October – an increase of 4.2% compared to the September rate of 668,000. Starts of multifamily buildings (five or more units) were at an annual rate of about 300,000 – down 15% from about 355,000 in September.
Permits were running at an annual rate of about 1,080,000 in October – an increase of 4.8% from the revised September rate of 1,031,000 and 1.2% above the October 2013 estimate of 1,067,000.
Authorizations for single-family homes were at a rate of 640,000 – an increase of 1.4% over the revised September figure of 631,000. Authorizations of units in buildings with five units or more were at a rate of 406,000.
About 881,000 new homes were completed in October – down 8.8% compared to the September rate of 966,000, but up 8.1% compared to the October 2013 rate of 815,000.
Of those completed homes, about 585,000 were single-family units while 289,000 were multifamily units.
Recently, the National Association of Home Builders (NAHB) forecast that construction of single-family homes would pick up in the fourth quarter and also in 2015.
‘Single-family builders are feeling good,’ says David Crowe, chief economist for NAHB, in a recent statement. ‘They are not overly confident – but confident enough to keep moving forward.’
He says the reason the single-family sector will finish out the year much stronger than it began is the ‘significant pent-up demand and steady job and economic growth that will allow trade-up buyers who have delayed home purchases due to job insecurity to enter the marketplace.’
NAHB is forecasting 991,000 total housing starts in 2014, up 6.6% from 930,000 units last year. Single-family production is expected to rise 2.5% to 637,000 units. What's more, NAHB predicts single-family housing production will increase a whopping 26% in 2015.
During NAHB's recent 2014 Fall Construction Forecast Webinar, Mark Zandi, chief economist at Moody's Analytics, said that prospects are good for continued gains in overall economic and housing activity.
‘The reason is that job growth is quite strong,’ Zandi said. ‘Currently, we are creating about 225,000 jobs per month, or 2.75 million per year. That is double the pace necessary to reduce unemployment and under employment, which augers very, very well for housing demand and the housing market more broadly.’