Builders held back on new home construction last month as the housing market continued to see declines in activity in many parts of the country.
Housing starts plunged 14.6 percent in October to a seasonally adjusted annual rate of 1.49 million, reaching a six-year low, the Commerce Department said today. Starts were down 27.4 percent from the same month a year ago.
The National Association of Realtors last week released its latest forecast for the housing market, saying it expects existing-home sales to fall 8.6 percent to 6.47 million in 2006, then fall another 0.6 percent to 6.43 million in 2007.
The Realtor trade group projects new-home sales to drop 16.8 percent to 1.07 million in 2006, and to fall another 8.7 percent next year to 975,000, largely due to a significant reduction in construction by builders.
Single-family housing starts in October were at a rate of 1.18 million, a 15.9 percent decline from September. The October rate for units in buildings with five units or more was 266,000.
Privately owned housing completions in October fell 3.8 percent to a seasonally adjusted annual rate of 1.95 million. Completions were down 0.7 percent from October of 2005.
Single-family housing completions fell 8.3 percent to a rate of 1.56 million in October from the previous month. The October rate for units in buildings with five units or more was 348,000.
Meanwhile, building permits on privately owned housing units fell 6.3 percent to a seasonally adjusted annual rate of 1.54 million in October. This was 28 percent lower than the rate for October 2005, which was 2.13 million.
Single-family authorizations in October were down 3.8 percent to a rate of 1.17 million. Authorizations of units in buildings with five units or more were at a rate of 294,000 in October.