Permits for New Homes Rise to 5 1/2-Year High on Multi-Family Demand

Permits for New Homes Rise to 5 1/2-Year High on Multi-Family DemandPermits for new U.S. home construction surged to their highest level in nearly 5-1/2 years in October, mostly on the strength of demand for multi-family buildings, the U.S. Census Bureau reported Tuesday.
Building permits — a harbinger of future housing activity — jumped 6.2 percent to a seasonally adjusted annual rate of 1.03 million units, the highest mark since June 2008. It beat economists’ expectations for a 930,000-unit rate.
But there is no mistake as to where there is demand: There was a double-digit increase for multi-family or apartment buildings last month.
Multi-family permit issuance jumped 15.3 percent to 414,000 units in October, while the single-family side posted just a 0.8 percent gain to 620,000 units.
This follows an overall 5.2 percent increase in permit issuance in September to 974,000 units.
Despite the disparity between single-family and mulit-family permits, builders feel a housing recovery is still under way, said Rick Judson, chairman of the National Association (NAHB) and a home builder from Charlotte, N.C.
“However, this fragile recovery still faces a number of challenges, including uncertainty in Washington, tight credit conditions for home buyers and limited availability of labor and lots,” Judson said.
Regionally, permits issuance in October held steady at 101,000 units in the Northeast and rose 15.4 percent in the West and 9.4 percent in the South. The Midwest posted a 9.6 percent decline.

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