More single-family and multifamily homes are entering the pipeline. Housing starts increased 25.5 percent in October, reaching a seasonally adjusted annual rate of 1.323 million, the Commerce Department reported Thursday. It is the highest pace since August 2007.
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Single-family housing starts zoomed to a nine-year high in October, reaching a rate of 869,000.
The higher-than-expected gain across all regions of the country “reaffirms our view that steady improvement in the housing market is likely to continue over the next two years,” Rob Martin of Barclays Bank PLC told The Wall Street Journal.
The multifamily market, which can be volatile, posted a whopping 74.5 percent month-over-month gain in October as apartment and condo construction ramped up, the Commerce Department reports.
Permits — a sign of future construction — were also up in October, albeit more modest. Building permits for multifamily and the single-family new housing market increased 0.3 percent to a seasonally adjusted annual rate of 1.229 million, which is the highest pace in nearly a year. Permits for single-family homes rose 2.7 percent in October to a rate of 762,000.
“Both single-family and multifamily starts now stand well above the pace implied by permits, and a correction over the next couple of months is inevitable,” says Ian Shepherdson, chief economist at Pantheon Macroeconomics.
Source: “U.S. Housing Starts Jump 25.5% in October,” The Wall Street Journal (Nov. 17, 2016)