Privately owned housing starts in October were at a seasonally adjusted annual rate of 1,425,000, which is 4.2% below the revised September estimate of 1,488,000 and 8.8% below the October 2021 rate of 1,563,000, according to the U.S. Census Bureau and the Department of Housing and Urban Development.
Single‐family housing starts last month were at a rate of 855,000, or 6.1% below the revised September figure of 911,000. The October rate for units in buildings with five units or more was 556,000.
“Although September’s figure was revised upward modestly, the general trend of single-family starts continues to be downward, in line with our expectations,” says Doug Duncan, chief economist at Fannie Mae. “Moving forward, we expect new-home construction to continue to soften as the effects of rising mortgage rates continue to weaken home buying demand, which is evidenced by this week’s survey from the National Association of Home Builders showing yet another decline in home builder confidence and the lowest foot traffic of prospective buyers since 2012, when excluding the initial COVID shock.”
Housing units authorized by building permits in October were at a seasonally adjusted annual rate of 1,526,000, which is 2.4% below the revised September rate of 1,564,000 and 10.1% below the October 2021 rate of 1,698,000. Single‐family authorizations last month were at a rate of 839,000, or 3.6% below the revised September figure of 870,000. Authorizations of units in buildings with five units or more were at a rate of 633,000.
October’s housing completions were at a seasonally adjusted annual rate of 1,339,000, which is 6.4% below the revised September estimate of 1,431,000, but it is 6.6% above the October 2021 rate of 1,256,000. Single‐family housing completions last month were at a rate of 961,000, or 8.3% below the revised September rate of 1,048,000. The October rate for units in buildings with five units or more was 362,000.
“Home builders are taking a more sensible approach to new construction in light of the shifting market,” says Ali Wolf, chief economist at Zonda. “The active home shopping buyer pool is down as consumers consider their shelter options in the face of high mortgage interest rates and higher total rents. While builders were eager to start homes before they sold them just 12 months ago, they are now slowing the pace to better align starts with sales.”
