Published By : 18 Nov 2015 | Published By : QYRESEARCH
Construction of new homes declined last month with builders dialing back on constructing condominiums and apartments, which pushed demand through most of the summer season.
Housing starts dropped 11 per cent in October from the previous month to register a seasonally adjusted annual growth rate of 1.06 million, according to the Commerce Department. Single family homes account for two thirds of the overall housing market and starts of this segment in October decline 2.4 per cent. Construction of multifamily units such as condominiums and apartments went down 25.1 per cent.
New applications for building permits are an indication for future home constructions and these applications went up 4.1 per cent to reach a seasonally adjusted annual growth rate of 1.15 million. Permits of single family homes spiked to their maximum limit since December 2007 and this jump was recorded in all regions except the Northeast.
The Wall Street Journal-surveyed economists had anticipated building permits in October to reach a seasonally adjusted annual rate of 1.14 million and housing starts at a rate of 1.16 million.
Figures pertaining to home construction are typically revised and can be rather volatile. The report released on Wednesday by the Commerce Department revealed that in September, new home starts went up 6.7 per cent, rising from the 6.5 per cent gain reported earlier.
The housing starts numbers reported on Wednesday also featured a 13.5 per cent margin of error.
Blerina Uruci, an economist with Barclays said in a note to clients that based on the month to month volatility, it is expected that starts will rise at a sustained albeit moderate rate, which will support construction activity and the housing recovery.
The housing market in the United States has been gaining momentum in 2015 after early years of recovery registering lackluster performance.