October Housing Starts Fall

(Image courtesy of Census Bureau; Breakout image courtesy of Charlotte May/pexels.com)

Privately-owned housing starts were at a seasonally adjusted annual rate of 1,311,000, the U.S. Census Bureau and U.S. Department of Housing and Urban Development jointly announced Nov. 19.

That’s a 3.1% drop below the revised September estimate of 1,353,000, and a 4% drop from October 2023.

Single-family starts specifically were at a rate of 970,000, down 6.9% from September.

The October rate for units in buildings with five units or more was 326,000.

“Housing starts missed consensus estimates and single-family starts declined in October, despite rising builder sentiment,” noted First American Deputy Chief Economist Odeta Kushi. “Recent mortgage rate volatility serves as a reminder that elevated financing costs could temper a broader housing market recovery.”

“Looking ahead to 2025, my baseline expectation is that single-family home construction is poised to steadily increase, bolstered by modest declines in financing costs for builders and buyers and by the scarcity of existing homes due to the ongoing mortgage rate lock-in effect,” she predicted.

“This is a sign that the housing market will remain anemic through winter, as high mortgage rates continue to hinder recovery,” observed CoreLogic Chief Economist Selma Hepp. “However, with homebuilder confidence gradually increasing, more newly built homes will make their way to market in 2025. The incoming administration could push for more housing to be built, perhaps even making federal lands available for residential construction and potentially limiting regulatory barriers that have added considerable costs to new construction.”

Building permits were at a seasonally adjusted annual rate of 1,416,000, down just 0.6% from the revised September rate of 1,425,000, and 7.7% below October 2023.

Single-family permits were at a rate of 968,000, 0.5% above the revised September figure. Authorizations for units in buildings with five or more were at a rate of 393,000 in the month.

Completions were at a seasonally adjusted annual rate of 1,614,000, 4.4% below September’s revised figure of 1,688,000, and 16.8% above the October 2023 rate of 1,382,000.

Single-family completions were at a rate of 986,000, 1.4% below the September revised number. The rate for units in building with five or more units was 615,000.