Housing Starts And Permits Post Strong Gains

Housing starts and permits posted unexpectedly strong gains in October, up 13.7 percent for starts to a 1.290 million annualized rate and up 5.9 percent for permits to 1.297 million. All readings show strength including single-family homes, up 5.3 percent for starts to an 877,000 rate and up 1.9 percent for permits to 839,000. Multi-family starts jumped 36.8 percent to 413,000 with permits up 13.9 percent to 458,000.

Completions are a special positive, up 12.6 percent overall to 1.232 million and adding immediate supply to a very thin new home market. This is the highest level of completions since February 2008. Homes under construction are also up, 0.9 percent higher to 1.096 million.

Housing started the year off strongly and stumbled through a weak spring season and a flat summer. The year-on-year rates, held down by multi-units, tell the story with total starts down 2.9 percent and permits up only 0.9 percent. But today's report does point to momentum for new home sales which surged to a 28-year high in the last report for September. Hurricane effects are limited in this report though starts in the South did swing lower in September and then swung back higher in October.

Recent History Of This Indicator:
A rise in single-family permits was the only positive from an otherwise weak housing starts & permits report for September. Starts in the month fell sharply to a 1.127 million annualized rate while permits, reflecting weakness for multi-family units that offset strength for single-family units, also fell sharply to 1.215 million. Hurricane effects in this report have been limited. The October consensus is for a 1.190 million rate for starts and 1.250 million for permits.