US Housing Starts Fall To Lowest Level In 18 Months
The Commerce Department on Wednesday released its report on US housing starts in October, reporting the lowest level of new home construction since April 2009, although building permits did rise slightly.
Housing starts fell by 11.7 percent in the month, the report showed, to a seasonally adjusted annual rate of 519,000, with the majority of the decline occurring in the volatile multi-family unit sector. Construction of condos and apartment buildings with at least five units plummeted a staggering 47.5 percent in the month.
New construction on single-family dwellings, however, dipped just 1.1 percent from September, and the level has remained relatively steady for the last four months. Single-family homes are estimated to account for about 75 percent of the overall market.
Building permits, meanwhile, rose in October by 0.5 percent to an annual pace of 547,000, as permits for single-family homes rising for the first time in seven months. Figures for permits in September were also revised slightly higher. Economists view permits as a strong ndicator of demand in the market.
Economists who participated in a recent survey conducted by MarketWatch had forecast, on average, a 600,000 pace for housing starts in October. September starts were revised downwardly from 610,000 to 588,000. Housing starts are a complex figure to measure and the data are commonly revised. Calculating starts has become even tougher in recent months amid drastic swings in the overall economy and changes in the government’s policy.
The US housing market has a significant impact on the broader economy, since construction of homes requires a number of materials and finished goods, not to mention the impact on furniture sales once the homes are sold.