Single-family authorizations in October were at a rate of 909,000, a 3.2 percent increase from the revised September figure of 881,000. Privately-owned housing units authorized by building permits in October were at a seasonally-adjusted annual rate of 1,461,000, a five percent rise above the revised September rate of 1,391,000 and 14.1 percent above the October 2018 rate of 1,281,000.
Single-family housing completions in October were at a rate of 897,000, a 4.5 percent increase from the revised September rate of 858,000. Privately-owned housing completions in October were at a seasonally-adjusted annual rate of 1,256,000, up 10.3 percent from the revised September estimate of 1,139,000 and 12.4 percent higher than the October 2018 rate of 1,117,000.
“Today’s pace of housing permits of over 1.3 million units is a good sign that home building is beginning to accelerate to keep up with the pace of household formation,” said First American Chief Economist Mark Fleming. “Even better news is the rate of single-family permits. At 909,000, it is the highest it’s been since August 2007, signaling the expected strength of demand in 2020.”
Realtor.com’s Senior Economist George Ratiu greeted the data with cautious optimism.
“Construction activity reflected elevated home builder sentiment, which reached a 20-month high in October,” Ratiu said. Permits, starts and completions jumped on a monthly and yearly basis, as home builders acted upon strong demand for homes. Starts rose 3.8 percent from September, and 8.5 percent higher than a year ago, to 1.31 million annualized units. Completed homes, ready for sale, increased 10.3 percent from last month and were 12.4 percent higher year-over-year, boosted by double-digit advances in the Northeast and West. Completions of multifamily units were up over 25.0 percent from last month, as higher-density developments reflect market dynamics.
“House shoppers stayed the course searching for their next homes,” Ratiu continued. “Market activity pushed inventory lower and drove median listing prices to $312,000, a 4.3 percent yearly increase. New homes in affordable price segments are the missing piece in the housing puzzle. Until builders increase supply to address the shortage of affordable housing, the real estate market will remain challenging for buyers.”
Bill Banfield, Quicken Loans executive vice president of capital markets, echoed Ratiu’s sentiment.
“The continued growth in single-family home building, and permits for future construction, should make consumers who are considering buying confident that they will have a solid choice of homes,” said Banfield. “This is an important report for future homebuyers since one of the largest deterrents to entering the market right now is the lack of robust housing options.”