A big jump up in single family starts combined with an anticipated rebound in multifamily to push the annual pace of total housing starts above 1.3 million in October.
In a joint release the Census Bureau and Department of Housing and Urban Development reported that the seasonally adjusted annual rate of single family housing starts was 869 thousand in October, up 10.7% from the September pace of 785 thousand. Starts in structures with 5 or more units rebounded from 255 thousand to 445 thousand, a pace more consistent with recent months. Overall, total housing starts quickened from a pace of 1.054 million in September to 1.323 million in October, a 25.5% annualized gain.
The rebound in multifamily starts was expected after the sharp fall-off in September, but the real strength in this report comes from the acceleration in the pace of single family starts. The surge in October was well ahead of the average pace of 768 thousand so far in 2016, and reminiscent of the pop in February, which was followed by slower but still strong growth. We expect single family starts to remain strong, if not at the October pace, through the end of the year and continue to strengthen in 2017. Over the medium term we expect momentum to shift as the pace of single family starts accelerates and the recovery in multifamily matures.