US housing starts and permits edge higher in October when compared to September this year

US housing starts in October edged up from a downwardly revised September reading on a modest bump in multifamily construction.

Total starts reached a seasonally adjusted annual rate (SAAR) of 1.372 million units, according to the US Census Bureau. Single-family starts were virtually unchanged at 970,000 units, while the multifamily sector increased 6.3% month over month to 402,000 units.

Multifamily starts trend downwards, in contrast to single-family

Despite October’s readings, the plunge in multifamily starts year over year has contrasted with a growing single-family sector. Total starts have fallen 4.2% from the year-ago pace, with single-family climbing 13.1% and multifamily declining 30.0%.

On a regional basis, total starts fell month over month in the Northeast and South, while the Midwest and West increased. That pattern has held true on an annual basis as well.

The solid increase in single-family starts in 2023 has run counter to builder sentiment, which has declined for four consecutive months to its lowest level in nearly a year. The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index was reported at 34 in November, a six-point drop from the October reading.

“The rise in interest rates since the end of August has dampened builder views of market conditions, as a large number of prospective buyers were priced out of the market,” said Alicia Huey, chairman of the NAHB.

Housing permits in November inched up 1.1% from October to 1.487 million units (SAAR). Permits have declined 4.4% from the year-ago level.

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