- By David M. Kinchen
U.S. housing production rose 3.6 percent in October over September to a seasonally adjusted annual rate of 894,000 units, according to a report issued Tuesday, Nov. 20, 2012 by the U.S. Commerce Department. This is the highest pace of new home construction since July of 2008. October 2012 starts were a whopping 41.9 percent above the October 2011 rate of 630,000.
Single-family housing starts in October were at a rate of 594,000; this is 0.2 percent below the revised September figure of 595,000. The October rate for units in buildings with five units or more was 285,000.
“This report is in line with our latest builder surveys, which show improving confidence and optimism in the marketplace as buyers take advantage of low mortgage rates and very attractive prices,” said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. “Builders are acting to meet rising demand while continuing to exercise caution by pulling a modest increase in the number of single family permits as the market continues to gradually gain its footing.”
“Today’s report bears out similar changes in other economic indicators that housing continues to recover at a slow but steady place, and is right in line with our expectations of modest month-to-month growth,” said NAHB Chief Economist David Crowe. “However, we still have a long way to go to get back to normal production as inaccurate appraisals, tight lending conditions for home buyers and policy uncertainties continue to impede the recovery.”
On a regional basis, overall housing starts rose 17.2 percent in the West and 8.9 percent in the Midwest while posting a storm-related decline of 6.5 percent in the Northeast and 2.5 percent in the South.
Permit issuance, which can be a harbinger of future building activity, fell 2.7 percent to a seasonally adjusted annual rate of 866,000 units in October. The drop in permits was focused in the apartment sector as multifamily permits fell 10.6 percent from an unusually high September level to 304,000 units. Meanwhile single-family permits rose 2.2 percent to 562,000 units.
Housing completions in October were at a seasonally adjusted annual rate of 772,000. This is 14.5 percent above the revised September estimate of 674,000 and is 33.6 percent (±17.3%) above the October 2011 rate of 578,000.
Single-family housing completions in October were at a rate of 542,000; this is 3.4 percent above the revised September rate of 524,000. The October rate for units in buildings with five units or more was 226,000.