Single-Family Starts Stable in October as Caution Grows


Total housing starts posted a 1.5 percent increase in October (1.23 million units) compared to a revised September estimate of 1.21 million units. However, total starts are 2.9 percent below lower than October 2017. Despite the recent market softness, 2018 is still shaping up to be the best year since the recession. Total housing starts are 5.6 percent higher for 2018 on a year-to-date basis, according to the joint data release from the Census Bureau and HUD.

The pace of single-family starts posted a slight monthly decline in October, decreasing 1.8 percent to a seasonally adjusted annual rate of 865,000. September and August single-family starts were revised up totaling to an additional 21,000 units. The weaker conditions for single-family construction are likely to continue, as noted by the November decline of the NAHB/Wells Fargo Housing Market Index, by eight points, now registering a score of 60.

On a year-to-date basis, single-family starts are 5.5 percent higher as of October relative to the first ten months of 2017. Single-family permits, a useful indicator of future construction activity, were slightly lower at 0.6 percent in October and have registered a 0.6 percent loss thus far in 2018 compared to last year.

Multifamily starts (2+ unit production) posted an increase of 6.2 percent in October to a 343,000 annual rate. After a strong start to the year, multifamily development is moving closer to our forecast of leveling-off conditions. On a year-to-date basis, multifamily 5+ unit production is 5.9 percent higher thus far in 2018, while multifamily 5+ unit permitting is trending lower with a decline of 0.2 percent year-to-date increase relative to 2017.

Regional data show – on a year-to-date basis positive conditions across the West (+15.2 percent), South (+3.9 percent), and the Northeast (+3.2 percent). However, single-family construction is down 2.5 percent for the year in the Midwest.

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