Housing Permits Up, Housing Starts Down

November 17 2010 (Jeff Alan)
housing-activity-picture
Housing activity was a mixed bag in October with housing starts dropping while building permits increased from the September. The number of housing starts is the lowest since April 2009.

Housing starts dropped in October to a 519,000 annual rate, down 12 percent from the revised September estimate of 588,000, the Commerce Department reported Wednesday.

Construction on single-family homes declined 1.1 percent, while work on multifamily units fell 44 percent. Building permits, a sign of future activity, rose 0.5 percent to a 550,000 rate from 547,000 in September.

“Starts are a reminder of just how miserable the situation is in housing,” says Chris Low, chief economist at FTN Financial in New York. “Sales have been so weak for so long that we continue to see starts bouncing along the bottom.”

Economists surveyed by Reuters had anticipated a starts rate in October of 600,000 — far higher than the actual outcome.

There was one hopeful sign in the starts numbers, as inventories of completed but unsold homes fell to a record low 79,500, suggesting the drag from an overhang of unsold homes might be lightening.

Tags: housing, housing starts, single-family homes, multifamily dwellings, building permits, housing inventories