"It would be a big mistake to equate [this] report with some kind of 'bubble' effect," said Gary Garczynski, president of the National Association of Home Builders (NAHB). "Builders simply took a breather after a feverish pace of activity in September. While the drop-off was more than expected, single-family housing production remained above the third quarter's robust 1.34 million unit pace. Moreover, Commerce's report on housing permits sets the stage for increased production in the months ahead."
Single-family starts declined 7% in October to a 1.35 million unit pace, while multifamily starts dropped by more than 29% to a 253,000 unit rate. Regionally, only the West posted a gain in housing starts, with a 3.6% increase. The Northeast, Midwest, and South registered declines of 18.8%, 19.5%, and 14.3%, respectively.
Newly issued housing permits were up 1.7% to a 1.76 million unit rate in October, on a 2% gain in the single-family sector and 1% rise on the multifamily side. Permits rose in the Midwest, South, and West by 1%, 3.5%, and 3.9%, respectively, with only the Northeast posting a decline, of 9.6%.
"All things considered, the housing market is still in very good shape, and we stand firm in our projection for a healthy 1.68 million housing starts in 2002 — which would be the highest number since the 1.80 million units started in 1986," said NAHB chief economist David Seiders.
Publication date: 11/18/2002