The Commerce Department said Wednesday, that the U.S. housing starts fell 11% in to a seasonally adjusted annual rate of 1.06 million units in October, although the number of building permits rose.
Consensus forecasts compiled by most news organizations called for starts to be around 1.15 million to 1.17 million units. The September tally was revised down to 1.19 million from the previously reported 1.21 million.
The October figure represented a 1.8% decline from the rate of 1.08 million in the same month a year ago.
Single-family housing starts in October were at a rate of 722,000, which was 2.4% below the revised September figure of 740,000. The October rate for units in buildings with five units or more was 327,000.
“Housing starts eased much more than expected in October; however, with permit applications picking up as anticipated, the foundations for the U.S. housing market remain solid,” said Andrew Grantham of CIBC Economics.READ ALSO – Mumbai attracts 40% private equity investment in Indian real estate
Meanwhile, the Commerce Department said the tally of building permits – important as an indicator of future construction activity – rose by 4.1% in October to an annualized rate of 1.15 million. This is 2.7% higher than 1.12 million in the same month a year ago.
Permit applications appear to be relatively stable between 1.1 million and 1.2 million, Grantham reported. “The stronger permit numbers suggest that home building should pick up again in the coming months and remain a positive for the U.S. economy heading into 2016,” he added.
Single-family authorizations in October were at a rate of 711,000, which was 2.4% percent above the revised September figure of 694,000. Authorizations of units in buildings with five units or more came in at a rate of 405,000 in October.