New housing starts inched up during October despite a fall in builder confidence, new data shows.
Housing starts of both single-family and multifamily homes rose 1.9 percent from September to reach a seasonally adjusted annual rate of 1,372,000, according to the United States Census Bureau — 4.2 percent below the rate recorded in October 2022.
That comes a day after data from the National Association of Home Builders showed that builder confidence in the market for newly built single-family homes dropped six points during October to the lowest level recorded since December 2022.
“Builder confidence has been declining for four consecutive months as higher mortgage rates have dampened homebuyer demand and added challenges to financing new housing projects,” Bright MLS Chief Economist Lisa Sturtevant said in a statement. “However, according to the U.S. Census Bureau, both the number of new single-family housing starts and permits for the construction of new single-family homes were up slightly between September and October and the pace of new single-family construction continues to surpass last year’s level.”
The increase was higher than experts had predicted.
“The October increase in housing starts was larger than expected,” Zillow Senior Economist Orphe Divounguy wrote following the release. “While housing starts and permits are still struggling to match levels from a year ago, starts remain above pre-pandemic levels.”
The rate of housing completions dropped 4.6 percent from September to a seasonally adjusted rate of 1,410,000, which was 4.6 percent above the October 2022 rate.
The number of new housing units authorized by building permits rose 1.1 percent from September to a seasonally adjusted rate of 1,487,000 — the highest level seen since May 2022 — which was 4.4 percent lower than the levels recorded a year earlier.
Multifamily permits and multifamily starts rose as well, with permits picking up 2.2 percent from September’s three-year low and starts rising 4.9 percent month over month. Fewer multifamily units were completed, however, with completions down 12.6 percent from September.
The pickup in permits and construction starts is, however, a sign that further relief for renters may not be far off.
“There’s a near-record number of multifamily units under construction and, as these come to market, there will be downward pressure on rents,” First American Deputy Chief Economist Odeta Kushi said in a statement.