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US Housing Starts Up in October

US home building rose in October to its highest rate in more than 4 yrs, the latest sign that the stagnant housing market is improving.

Housing starts increased 3.6% last month from September to a seasonally adjusted annual rate of 894,000, the Commerce Department said Tuesday. Compared with a year earlier, new home construction was up 41.9%. It is at its highest rate since July 2008, before the depths of the financial crisis.

Construction of single-family homes, which made up two-thirds of housing starts last month, dropped 0.2% in October to a rate of 594,000 units. Single-family construction was up 35.3% from a year earlier.

The figures were above expectations. Economists surveyed forecast overall housing starts would drop to a seasonally adjusted annual rate of 833,000, which would have been a 4.5% decline from September’s previously reported figures.

Starts in September were revised down to a rate of 863,000, reflecting a 15.1% increase from August.

The numbers are the latest indication the housing market is getting back on track.

Sales of previously owned homes grew 2.1% in October, marking the 16th consecutive month of year-over-year increases, the National Association of Realtors said Monday.

Spending on home construction and home improvements has contributed to economic growth in 6 straight Quarters, the Commerce Department said last month.

Tuesday’s report showed that the number of new building permits, an indication of future construction, fell by 2.7% to an annualized level of 866,000 in October. That was above economists’ estimates for a rate of 860,000.

The Commerce data showed new building was up in 2 of 4 US regions. Building rose 17.2% in the West and 8.9% in the Midwest, but dropped 6.5% in the Northeast and 2.5% in the South.

Actual housing starts, which are calculated without seasonal adjustments, inched up slightly to 77,900 from a downwardly revised 77,800 in September. Lumber and commodities markets watch those numbers closely to gauge demand.