A big jump up in single-family housing starts in October combined with a Midwestern rebound in multifamily housing construction to push the annual pace of total U.S. housing starts above 1.3 million.
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 869,000 in October, up 10.7% from the September pace of 785,000. Starts in structures with five or more units rebounded from 255,000 to 445,000, 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 accelerating single-family starts. The surge in October was well ahead of the average annual pace of 768,000 so far in 2016, and reminiscent of the pop in February, which was followed by strong but slower growth.
The National Association of Home Builders expects 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.
Building permits rose less dramatically than starts, climbing just 0.3% overall. “Moreover, single-family starts are now running 7.3% above permits,” according to the Wells Fargo Economics Group’s analysis of the Census numbers, “Suggesting that some payback is in order.”
Wells Fargo suggests that some of the October rebound might be a reflection of favorable weather following weeks of widely spread poor conditions for construction.
October Single Family Starts
|
Region |
Month Change |
October Starts* |
Year to Date* |
|
Northeast |
+11.3% |
69,000 |
+13.8% |
|
South |
+7.3% |
454,000 |
+9.7% |
|
Midwest |
+6.0% |
123,000 |
+10.8% |
|
West |
+21.2% |
223,000 |
+9.3% |
|
U.S. Total |
+10.7% |
869,000 |
+10.1% |
* October starts are seasonally adjusted annual rates. Change in year-to-date starts based on monthly actuals.
Not only did single-family starts in each of the four U.S. regions the Census data tracks grow strongly from September to Ocotber, the regions are all showing significant strength year to date, when compared to the same period of 2015.
October Multifamily* Starts
|
Region |
Month Change |
October Starts* |
Year to Date* |
|
West |
+27.1% |
122,000 |
+2.3% |
|
South |
+94.0% |
194,000 |
+0.4% |
|
Midwest |
+166.7% |
96,000 |
+38.4% |
|
Northeast |
+105.9% |
70,000 |
-30.4% |
|
U.S. Total |
+68.8% |
454,000 |
-1.5% |
* Multifamily starts here include any building that comprise two or more housing units. October starts are seasonally adjusted annual rates. Change in year-to-date starts based on monthly actuals.
A huge October surge in multifamily starts in the Midwest puts that region in position to continue bucking the trend of housing’s shift from multifamily to single-family starts. Year-to-date multifamily starts in the Midwest are a whopping 38.4% above that of the first ten months of 2015.
