US October housing starts up 3.0 pct to 1.229 mln unit annual rate

US October housing starts up 3.0 pct to 1.229 mln unit annual rate

	Published : Tue, 20 Nov 2007 14:28 By : Agencies Print this Story

WASHINGTON (Thomson Financial) - US homebuilders broke ground on more apartment buildings in October, but cut back significantly on single-family homes and on acquiring permits for future building projects in the face of a dismal housing market.

October housing starts unexpectedly rose 3.0 pct to a 1.229 mln unit annual rate, the Commerce Department reported today. Building permits fell 6.6 pct for the month to a 1.178 mln unit rate.

Economists were expecting a small decline in starts to 1.160 mln units after September's plunge. Starts dropped a revised 11.4 pct in September. The forecast for permits was for a smaller decline to 1.219 mln units.

The overall 3.0 pct increase number masks a decline of 7.3 pct in single-family home starts to less than a million-unit rate of 884,000, the lowest level of single-family homebuilding since the last recession in October of 1991.

Construction of multi-unit buildings was up 44.4 pct in October, accounting for all of the 3.0 pct increase, but that was simply a rebound from the revised 35.9 pct drop in September.

Compared with October of 2006, housing starts were down 16.4 pct and permits down 24.5 pct. The single-family construction situation was even worse, with starts down 25.1 pct and permits down 31.0 pct year-over-year.

The pattern of starts varied considerably across US regions. In the Northeast they rose 8.5 pct overall in October with an exceptional 29.5 pct rise for single-family homes. Midwest starts 21.1 pct, also with a big 15.1 pct increase in single-family starts. Analysts had expected the unusually warm October weather to produce a spike in construction.

In the South, where weather is less of a factor, overall starts dropped 4.6 pct and single-family starts fell 19.5 pct. Starts in the West rose 5.8 pct overall but dropped 8.1 pct for single-family homes.

dennis.moore@thomson.com

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