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Housing Starts, Permits Surged Last Month

Housing Starts, Permits Surged Last Month

Nationwide production and permitting of new homes rose sharply in September to their highest levels in more than four years, according to government figures released on Oct. 17. Moreover, the gains were registered across both the single-family and multifamily sectors, as well as most parts of the country. While starts rose 15% to a seasonally adjusted annual rate of 872,000 units, permits rose 11.6% to 894,000 units. Single-family starts registered an 11% gain to 603,000 units (their best pace since August 2008) and multifamily starts registered a 25.1% gain to 269,000 units (their best pace since September of 2008). 

Meanwhile, single-family permits rose 6.7% to 545,000 units and multifamily permits rose 20.3% to 349,000 units -- the highest point for both since July 2008. Regionally, starts gained 6.7% in the Midwest, 19.9% in the South and 20.1% in the West, but fell 5.1% in the Northeast, while permits gained across the board with a 6.0% increase in the Northeast, a 19.5% increase in the Midwest, a 10.5% increase in the South and an 11.3% increase in the West in September. Commenting on the latest numbers, NAHB Chief Economist David Crowe said they "correspond with the significant gains we've seen in builder confidence over the past year, and confirm our view that a housing recovery is solidly underway in a growing number of markets nationwide." However, he also cautioned that "We are now almost at the half-way mark in terms of what would be considered a normal amount of new-home construction in a healthy economy, and we need to see consistent improvement like this over an extended period to get back to where the market should be in terms of generating jobs and economic growth."

Builder Confidence Edged Slightly Higher in October

Builder confidence in the market for newly built, single-family homes edged slightly higher for a sixth consecutive month in October, according to the NAHB/Wells Fargo Housing Market Index(HMI). The latest, one-point gain brings the index to 41, its strongest level since June of 2006. Many builders are reporting increases in the number of serious buyers visiting their sales offices, and the overall confidence measure is much higher than it was at this time last year (when it stood at 17). Following substantial increases in the previous month, the HMI components measuring current sales conditions and sales prospects for the next six months each remained unchanged in October at 42 and 51, respectively.

Meanwhile, the component measuring traffic of prospective buyers increased 5 points to 35, its highest level since April of 2006. Looking at three-month moving averages, every region but one posted gains in builder confidence in October, with the Midwest and West gaining two points each to 42 and 44, respectively, the South gaining three points to 39, and the Northeast’s three-month moving average remaining unchanged at 29. According to NAHB Chief Economist David Crowe, “The slight gain in builder confidence this month is an indication that, while still moving forward, the speed at which the housing recovery is proceeding is being moderated by the various constraints such as tight credit, difficult appraisals and more recently, the limited inventory of buildable lots in certain markets."

Today's photos are those of Archival Designs' Kildare Castle.

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  • Joanne Loftus
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