Housing Starts Drop Slightly in October

As mortgage rates increased last month, housing starts slowed. According to the National Association of Home Builders’ Eye On Housing blog, overall housing starts fell by 3.1% in October to a seasonally adjusted annual rate of 1.31 million units. At the same time, average monthly mortgage rates increased by a quarter-point from 6.18% to 6.43% between September and October.

While overall starts fell just slightly, single-family starts decreased by 6.9% in October to a 970,000 seasonally adjusted annual rate. On the other hand, multifamily units saw starts increase by 9.6% to 341,000 units. However, on a year-to-date basis, single-family construction is up by 9.3%, while multifamily starts are down 29.3%.

Although housing starts declined in October, builder sentiment improved for a third straight month in November as builders anticipate an improved regulatory environment in 2025 that will allow the industry to increase housing supply. Further interest rate cuts from the Federal Reserve through 2025 should result in lower interest rates for construction and development loans, helping to lead to a stabilization for apartment construction and expansion for single-family home building. Read more