–1-Family Starts -0.2%; NE and South Regions Weaken

By Joseph Plocek

WASHINGTON (MNI) – The U.S. October housing starts data were
surprisingly good, showing no hurricane effects and only a slight
pullback in permits after a September surge.

October housing starts printed +3.6% to 894,000, another upside
surprise, and the Commerce Department said in a special note that
hurricane effects were minimal.

Commerce said there were no changes to data collection, which did
include data from affected areas; and there were no adjustments made to
seasonal factors or other parameters due to the storm. Also,
construction was affected in only a small part of country for a few
days.

Permits printed -2.7% to a still high 866,000 after a surge in
Sept. This confirms relative strength in housing.

Single-family starts fell a mere 0.2% to 594,000 and multis
were up a huge 11.9% to 300,000.

By area, starts were mixed: -6.5% in the Northeast (ongoing
softness) and -2.5% in the South (backed off after a September jump);
but +8.9% in the Midwest and +17.2% in the West. Most of the big moves
were in key single families, which continue to exhibit a huge up-trend.

Permits were down in the Northeast and West but up in the other
regions.

These data show continuing strength. Units completed jumped 14.5%
to 772,000 in October, and starts now are up almost 42% over the year.

But remember that housing still has a long way to go to get these
numbers back into the 1.2+ million area that is consistent with
longer-term growth and household formation. And housing remains well
below the prior peaks when activity was frenzied: 2.4 million starts in
1972 and 1.8 million in the mid-2000’s.

A special note in the housing report reminded that following the
1992 hurricane the definition of a new housing start was modified to
include structures where the entire building is razed and a new house
built on the existing foundation. This could boost starts ahead.
Manufactured housing is not counted as new construction.

**MNI Washington Bureau: (202)371-2121**

[TOPICS: MAUDS$,M$U$$$,MT$$$$,MAUDR$]