The Census Bureau reported on building permits, but the housing starts data has been delayed until December 18 due to the partial federal government shutdown in early October. The pace of building permit issuance rose to a seasonally adjusted annual rate of 974 thousand in September and rose again to 1,034 thousand annually in October. The pace of August permitting was revised up to 926 thousand annually.
Single family permitting continued its steady progress at a pace of 620 thousand annually in October, but the strength in today’s report was concentrated in the multifamily sector where permitting surged to 414 thousand units annually.
That’s according to the permits data (issued by local jurisdictions) but it’s worth noting that the composition of activity is likely to change when we see the actual starts data in December. The single family starts are likely to reflect stronger growth than seen in the permits data because building in non-permit issuing areas is included in the starts data, and some permits are reclassified from multifamily to single family when started.
The reclassifications occur when local jurisdictions define some configurations multifamily (e.g., townhouses) but the Census Bureau treats them as single family. These reclassifications boost single family starts relative to permits and depress multifamily starts relative to permits.
Overall, today’s report is a positive signal that the government shutdown and the uncertainty surrounding the ongoing negotiations to keep the government running have not yet taken a toll on the housing market recovery, but we’ll see how much of that strength is sustained in December’s housing starts report and in the months ahead.