Builders sharply curtailed production and permitting in October in anticipation of the Nov. 30 expiration of the first-time homebuyer tax credit, the Commerce Department reported Wednesday.
The Census Bureau and the Department of Housing and Urban Development reported a 10.6% month-to-month drop in starts to a seasonally adjusted annual pace of 529,000, 30.7% below the rate last October and the lowest since April, 2009. Economists surveyed by Dow Jones Newswires were expecting an increase of 1.7%; the consensus on Wall Street was an annual pace of 598,000.
Single-family housing starts were down 6.8% from September to a rate of 476,000, 10.9% below October, 2008. Multifamily starts in buildings with five units or more were down 33.3% to 48,000, 78.1% off the pace of last October.
Permits fell at a slower rate, down 4% from September to a seasonally adjusted annual rate of 552,000, 24.3% below October of last year.Single-family permits were off only 0.2% to a rate of 451,000, 4% below a year ago. Multifamily permits in buildings with five units or more were down 18.3% from September to a rate of 85,000 and down 15.8% to 16,000 in buildings with two to four units, down 51.5% from last year's pace.
Regionally, starts were down across the board. The Northeast was off 18.8% overall and down 9.6% for single-family; the Midwest was down 10.6% and 4.8%, repectively; the South was down 9.6% and 7.3%; and the West was down 8.5% and 5.9%. Overall permits were flat in the Northeast but up 2.2% for single family; up 2% and down 1.4%, respectively, in the Midwest; down 5.8% and down 1.3% in the South; and down 6.7% but up 2.1% in the West.
Homes under construction were down 3.4% from September nationally and down 2.4% in the Northeast, flat in the Midwest, down 4.1% in the South and down 5.4% in the West. Completions were up 1.9% from September nationally and up 1% in the Northeast, down 21.1% in the Midwest, up 6.1% in the South and up 8.4% in the West.