Housing construction fell slightly in October

Construction on single-family houses hit its fastest pace in a year last month, a good sign for the broader economic recovery. 

Combined housing starts fell 2.8 percent in October to a seasonally adjusted annual rate of 1.009 million units on a sharp drop in multifamily unit building, a typically volatile part of the data, the Commerce Department reported on Wednesday.

{mosads}September construction had surged 7.8 percent to 1.038 million units.

“The rise in single-family starts is more proof that the economy is firming and consumer confidence is growing,” said Kevin Kelly, chairman of the National Association of Home Builders (NAHB), and a homebuilder and developer from Wilmington, Del.

“We expect continued upward momentum into next year,” he said.

The 2.8 percent drop in overall starts last month was due primarily to a 15.4 percent decline and a 313,000 unit pace in multifamily construction.

Meanwhile, single-family starts posted a 4.6 percent gain to 696,000 units. 

“The increase in single-family starts shows that the housing market continues to recover at a steady, gradual pace,” said David Crowe, NAHB’s chief economist.

“On the multifamily side, production is stabilizing above historic levels as demand for rental housing increases.”

Regionally, housing production dropped in three of four regions — the Northeast (16.4%), Midwest (18.5) and West (10.9).

Meanwhile, production rose by 10.1 percent in the South.

Building permits also showed a gain last month, rising 4.8 percent to a seasonally adjusted annual rate of 1.08 million units.

Multi-family permits rose 10 percent to 440,000 units while single-family permits increased 1.4 percent to 640,000 units.

Two of four regions showed gains in permits — 8.8 percent in the South and 21.6 percent in the West.

Permits in the Northeast and Midwest fell 21.5 percent and 11.4 percent, respectively.