Housing Starts Up Monthly, Down Annually

According to the U.S. Department of Commerce, housing starts increased 1.5 percent in October 2018 month-over-month, but declined 2.9 percent annually.

The rate of permits issued dropped 6 percent annually to a seasonally adjusted annual rate of 1.263 million, suggesting that future housing activity is on pace for a slowdown. MarketWatch reports that government data on new residential construction is "notoriously choppy and subject to hefty revisions," and previous months' data has been revised upward, though, Andrea Riquier writes that construction is still slowing down. Housing stocks decreased as well following a decrease in builder confidence and overall market volatility.

Single-family starts, is also losing ground. In October, they were 1.8 percent lower than in September and 2.6 percent lower than a year ago. Analysts watch single-family starts closely because those homes are mostly built for purchase, rather than rent. If builders start more of them, it’s a vote of confidence in the economy and buyers’ ability to finance their homes. They are also more labor-intensive, which means the economy will get more of a boost from such construction than from work on multi-family structures.

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