Permits to build new homes increased 4.1% in October to a level of 1.15 million per year. Both single-family and multifamily levels increased by 2.4% and 6.8% respectively. On a year-to-date basis, total permits are up 11.9%; single-family are up 8.6% and multifamily are up 17.2% as the housing market continues its modest pace of recovery.
Housing starts were down primarily due to a fall in multifamily activity which was up significantly in September and expected to readjust. October multifamily starts at 338,000 were the lowest since March 2015 but increased by 10.4% year to date compared to last year.
Single-family starts were down 2.4% to 722,000 on an annual basis. Three of the four census regions reported slight increases while single-family starts in the South were down 6.9%. The drop appears to be due to especially stormy weather throughout the southern coast in October. Year-to-date single-family sums are up across all regions as are single-family permits suggesting that the slight October drop is temporary.
The steady increase in residential starts in 2015 has produced a steady increase in the number of homes under construction although carrying them through to completion slowed a bit as labor shortages, especially finishing carpenters, slow the ability to get finishing touches done.
The October report from Census and HUD provide nothing to change NAHB’s forecast for continued modest growth in 2015 and some slight acceleration in single-family construction in 2016 as the economy grows, jobs are added and mortgage rates remain relatively low.