Steel Markets

Housing Starts Rocket in October led by Multifamily Structures

November 17, 2016

Housing starts jumped 25.5 percent in October from September to a seasonally adjusted annual rate of 1,323,000. Starts of multifamily structures of 5 units or more leapt 74.5 percent from the previous month for a rate of 445,000 and were up 28.2 percent year over year. Single family housing starts grew 10.7 percent from September and were up 21.7 percent year over year to a rate of 869,000 units.

Housing starts were especially strong in the Northeast and Midwest with each posting month over month gains of over 44 percent. The West followed with a gain of 23.2 percent and the South gaining 17.9 percent.

“These robust figures correlate with strong builder optimism in the housing market,” said Ed Brady, chairman of the National Association of Home Builders (NAHB). “A firming job market, a growing economy and rising household formations will keep the housing recovery on track into next year.”

“Multifamily production bounced back after an unusually weak reading last month while single-family starts exhibited unusually strong growth as well,” said NAHB Chief Economist Robert Dietz. “Though October’s single- and multifamily production rates are clearly unsustainable, we expect continued growth in the housing sector in the months ahead.”

Permit authorizations, an indicator of future building, were at a seasonally adjusted annual rate of 1,229,000, 0.3 percent above the revised September rate of 1,225,000 and 4.6 percent above the October 2015 estimate of 1,175,000. Single family authorizations, which accounted for approximately 60 percent of permits issued in October, led the increase at a rate of 762,000, with a monthly gain of 2.7 percent and a yearly gain of 5.1 percent. Multifamily authorizations of 5 units or more fell 1.8 percent from September.

The Midwest led in permit authorizations at a monthly increase of 12.1 percent followed by the West with an increase of 7.4 percent. Permit authorizations softened in the Northwest and South.

“Ongoing job creation, rising incomes and attractive mortgage rates are supporting demand in the single-family housing sector. This will help keep housing on a steady, upward glide path in the months ahead,” said NAHB Chief Economist Robert Dietz.