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"This expected rebound virtually ensures that home builders will set a new record for single-family home production in 2004, and is an excellent sign of continued momentum in the overall housing market," said Bobby Rayburn, president of the National Association of Home Builders (NAHB).
Starts rose across the board in October, with substantial gains registered in both the single-family and multifamily sectors as well as in every region of the country. Single-family starts gained 5.7 percent to reach a seasonally adjusted annual rate of 1.65 million units. Continuing at this pace, it would surpass last year's record that was just shy of 1.5 million units. Meanwhile, multifamily starts bounced up 9.5 percent to a seasonally adjusted annual rate of 382,000, the fastest pace since December 2003.
"Excellent financing conditions are still the key to solid housing market performance, including much of the strength on the condo side of the multifamily market," said David Seiders, NAHB's chief economist. "Improving economic conditions, particularly job and income growth, are additional factors in housing's favor heading forward - and solid increases in house values continue to buoy demand."
Regionally, starts posted the biggest gain, of 20 percent, in the Northeast, followed by an 8.6 percent boost in the Midwest, a 5 percent increase in the West, and a 4 percent improvement in the South.
Issuance of building permits, which can be an indicator of future building activity, was virtually unchanged in October with a less than 1 percent decline to a seasonally adjusted annual rate of 1.98 million units. Single-family permits declined 2.2 percent while multifamily permits rose 4.6 percent.
"This is a very positive report for housing and shows why builders are as optimistic as our latest surveys have indicated," said Seiders. "The nation's housing market is healthy, stable, and headed for a strong finish in 2004."
Publication date: 11/15/2004