Hitting the lowest level since March 2015, the October drop was lower than expectations, and may have been in part due to construction delays in the South as the result of flooding.
Single-family housing starts declined 2.4 percent, while multifamily starts, which were strong enough in recent months to put a positive spin on the housing market, plummeted 25.1 percent. Moreover, housing starts declined 1.8 percent year-over-year.
Somewhat offsetting to the housing starts drop, building permits rose 4.1 percent in October over the previous month, which may indicate construction activity may be stronger in November. Permits rose 2.4 percent for single-family homes and 6.8 percent for multi-family, indicating the continuing demand for apartments. Also, permits rose 2.7 percent year-over-year.
Analysts see the slow down in November as a temporary, and perhaps, seasonal setback, since the fourth quarter is typically the slowest for construction activity due to the cooler weather.
Overall, the improving economy and job market, combined with low interest rates, helped spur the housing market into a good year in 2015, and economists sense the momentum may carry into 2016. ##
(Photo credit: associatedpress/Sue Orgocki–new home construction)
