Privately owned housing starts in October were at a seasonally adjusted annual rate of 1,530,000. This is a 4.9% increase from the revised September estimate of 1,459,000 and a 14.2% increase from the October 2019 rate of 1,340,000, according to the monthly new residential construction data from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.
Single-family housing starts in October were at a rate of 1,179,000, which is 6.4% above the revised September figure of 1,108,000. Plus, the October rate for units in buildings with five units or more was 334,000.
“The current housing market is characterized by robust demand, but not enough homes for sale. After hitting a low point in the spring, mortgage applications to purchase a home rebounded quickly and have remained higher compared to the previous year for 26 straight weeks,” says Odeta Kushi, deputy chief economist at First American. “Despite the economic headwinds from the pandemic, demographic demand from millennials forming households, low mortgage rates, and existing homeowners taking their equity and putting it into purchasing something bigger and better are boosting demand for homes.”
Housing completions in October were at a seasonally adjusted annual rate of 1,343,000, which is 4.5% below the revised September estimate of 1,406,000, but 5.4% above the October 2019 rate of 1,274,000. Single-family housing completions last month were at a rate of 883,000, or 3.4% below the revised September rate of 914,000. The October rate for units in buildings with five units or more was 444,000.
Privately owned housing units authorized by building permits in October were at a seasonally adjusted annual rate of 1,545,000. This is virtually unchanged from the revised September rate of 1,545,000, but 2.8% above the October 2019 rate of 1,503,000. Single-family authorizations in October were at a rate of 1,120,000, or 0.6% above the revised September figure of 1,113,000. Authorizations of units in buildings with five units or more were at a rate of 365,000.
“The new-home sales pace over the past six months has accelerated more quickly than the construction pace, suggesting home builders will have to catch up by maintaining a higher pace of construction relative to sales going forward,” says Doug Duncan, chief economist at Fannie Mae. “Prior data released by the Census Bureau indicate this process may have begun in September, when new sales pulled back a bit but construction accelerated. We expect a strong construction pace relative to sales to continue for the time being.”
