Single-family home construction increased 4.2% in October to top off at 696,000 on an annualized basis. This rate is the second highest since early 2008. Single-family permits also rose 1.4% to 640,000 and were also the highest since early 2008 except for November of last year.
Overall starts were down 2.8% but remaining just over one million and driven down by a 15.4% drop in multifamily apartment construction. Multifamily starts have tended to see-saw on a month to month basis but remain in the healthy range of over 350,000 per year when averaged over several months.
Regionally, only the Midwest saw a decline in single-family starts and some of that decline was due to an unusually large number in September. The three-month moving average for Midwest single-family starts still remains above 100,000, which was last seen in 2007.
Permits drawn were up 4.8% to 1,080,000 on an annualized basis, which is the eighth month out of 10 that permits have been over 1 million. Multifamily permits were up 10% to 440,000.
The continued modest improvement in the single-family market supports the expectation of more and stronger growth in 2015 as consumers gain confidence in their economic futures, mortgage rates remain very low by historic standards and home prices continue to be affordable to those with good credit and a solid employment history.