WASHINGTON, DC-Residential construction permits in October reached their highest level since June 2008, climbing 6.2% from the previous month's tally of 974,000 to an annualized 1.03 million permits, according to Commerce Department figures released Tuesday. The October tally was up 13.9% year-over-year from 908,000.
The fastest-growing segment was multifamily properties of five or more units, for which 387,000 permits were issued last month. Singe-family homes increased less than 1% from September.
Bloomberg, which had reported a median estimate of 930,000 permits overall for October based on a survey of 47 economists, noted that builders are looking past increases in borrowing costs and going ahead with larger projects.
“Housing will still contribute to growth,” Brian Jones, a senior US economist at Societe Generale in New York, told Bloomberg. “We have had a backup in interest rates, but I don't think the backup has been large enough to really choke off housing.” Jones' estimate of 985,000 permits was the highest among those surveyed by Bloomberg.
That being said, the government data may not tell the whole story as yet, thanks to delays in data releases due to the federal government shutdown in October. The National Multi Housing Council notes that multifamily starts and completions rose in the third quarter, while the number of permits declined—but adds that the construction data are for July and August only.
Permitsduring Q3 decreased to a seasonally adjusted annual rate of 297,000, down 8.2% from the prior quarter and 1.2% Y-O-Y, following an increase between Q2 and Q1 of this year. Starts increased 2.7% to a SAAR of 265,000, 17.6% higher than the year-ago level.
“Even with the increase, however, starts remain below the 300,000 level reached in the first quarter,” according to a research note from the NMHC. The council notes that following aslight decrease in Q2, completions rose to a SAAR of 190,000. It represents a gain of 11.1% percent from the previous quarter and 10.9% higher than the year prior.
The US Census Bureau said Tuesday that due to the government shutdown, the release of new housing unit starts and housing unit completions would be pushed back to Dec. 18. Normally the data are released at the same time as the figures for residential permits
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