Topic: Featured

October Housing Starts Rise Above Expectations

by Dr. Malio West, CMA, PMP

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By Dr. West and Global Accounting Team |  Nov 18, 2020 11:00 AM EST
 
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Wednesday morning, before the opening bell, the U.S. Census Bureau reported that housing starts increased 4.9% month over month in October to a seasonally adjusted annual rate of 1.53 million. That figure was up from September's revised rate of 1.459 million and exceeded expectations for a 1.46 million unit rate of starts. With October's reading, housing starts are up 14.2% from the same time last year.

 

Digging deeper, monthly single-family housing starts advanced 6.4% (+29.4% year over year) to a seasonally adjusted annual rate of 1,179,000, up from September's revised rate of 1,108,000, while housing starts for complexes with five or more units fell 3.2% (-19.9% YoY) to a seasonally adjusted annual rate of 334,000, down from September's revised rate of 345,000.

By region, on a monthly basis, total housing starts fell 38.6% in the Northeast (-32.8% YoY) while rising 3.3% in the Midwest (+23.0% YoY), 12.9% in the South (+24.3% YoY) and 4.2% in the West (+5.4% YoY).

 
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As for building permits, which "provide national, state, and local statistics on the number and valuation of new privately-owned housing units authorized by building permits in the United States," units authorized in October were "virtually unchanged" at a seasonally adjusted annual rate of 1.545 million, missing expectations for a rise to a 1.57 million seasonally adjusted rate. With October's reading, permits are up 2.8% from the same time last year.

 

Breaking the headline reading down further, on a monthly basis, permits for single-unit homes advanced 0.6% (+20.6% YoY), while permits for complexes with two to four units increased 36.4% (+25.0% YoY), and permits issued for complexes with five or more units declined 5.9% (-30.6% YoY).

 

By region, on a monthly basis, total permits fell 9.5% in the Northeast (-13.% YoY), while advancing 2.9% in the Midwest (+16.4% YoY), 0.7% in the South (+3.9%) and 0.5% in the West (+0.5% YoY). 

All in all, the reading was solid and speaks to sustained strength in the housing market as low rates and a desire for more space continue to support demand.
 

Finally, as we always do, we remind members -- and note to our newer members -- that this is a crucial dynamic as the housing market punches above its weight due to its influence on various other sectors of the economy such as construction and associated services subscription, and expenditures (think internet, utilities, etc.).

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Dr. Malio West, CMA, PMP

Dr. West is a US Navy Veteran that served during Desert Shield/Desert Storm in Kuwait City. After the US Navy, Dr. West spent time in Singapore, Tokyo, Auckland, and Hong Kong working in international accounting focused on the financial services industry, at an executive level.

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