At long last, the housing industry is showing signs of life. Permits were up 10.9% in October to an annual rate of 653,000, the best reading the industry has seen in 19 months, according to data released today by the U.S. Census Bureau. On an annual basis, permits were up 17.7%. Both single-family and multifamily permits were up on a monthly basis, 5.1% and 24.4%, respectively.
While housing starts slipped by 0.3%, they were up 16.5% year-over-year. The monthly decrease was fueled by an 8.3% dip in multifamily starts, after the sector saw a 35.0% increase in September. The change brought the annual rate for units in buildings of five units or more to 183,000. Single-family starts were up 3.9% for the month, for an annual rate of 430,000.
The news helps to substantiate yesterday’s report that builders are feeling more optimistic about the industry than they have been for more than a year, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), which tracks builder confidence.
The numbers are still low, of course. Both starts and permits will likely set record lows this year, and while an HMI reading of 20 is higher than it’s been since May 2010, it would take a reading of more than 50 to indicate that a majority of builders describe conditions as "good."
Still, the report was a good one, wrote Patrick Newport, U.S. economist at IHS Global Insight, in a statement today. "It has supporting evidence that the single-family market is finally getting off the mat and that the multifamily segment is continuing to make small strides, and that we should expect good housing starts numbers the rest of this year."
Claire Easley is a senior editor at Builder.