In October, Housing Starts fell to a seasonally adjusted annual rate of just 529,000, a 10.6% decline from September and down 30.7% from a year ago. That puts housing starts at their lowest level since April, and takes a lot of steam out of the incipient economic recovery.
Most of the damage, however, came in the very volatile apartment and condo area. Starts in buildings with five or more units dropped to their lowest level yet in this cycle at an annualized rate of just 48,000. That is down 33.3% from September and is off 78.1% from an already depressed level of a year ago.
When most people think about housing starts, they think about single family starts. There the news was bad, but not quite as bad as the news from "condo-land." Nationwide, single-family housing starts fell 6.8% from September and are down 10.9% from a year ago, the lowest level of single-family housing starts since June.
Geographically, the declines were widespread. On a monthly basis the hardest hit area was the Northeast, which is fortunately the smallest and least important of the four regions (10.6% of the total in October) when it comes to housing starts (and just about any other housing related data).?Starts there fell by 18.8% for the month and are down 26.3% on a year-over-year basis.
It was not just a case of the Northeast having relatively more condos and apartments than other areas of the country, as single family starts there were down by 9.6% for the month. The next worst hit was the Midwest, where starts fell by 10.6% for the month and are down 23.1% year-over-year.
The very large and important South region suffered a 9.6% decline for the month and is down 33.2% year over year. In October, the South was responsible for 51.4% of all housing starts nationwide. Out West, housing starts were down by 8.5% for the month and down 32.1% year over year.
Looking forward, the best indicator of future housing starts is Building Permits. There, too, the news was on the downbeat side, with nationwide permits at a seasonally adjusted annual rate of 552,000, down by 4.0% from September and off 24.3% from a year ago. There, however, the declines were very much centered on the Apartment and Condo area, with single-family permits down just 0.2% for the month and 4.0% on a year-over-year basis. Building permits for buildings with five or more units, on the other hand, plunged by 18.3% for the month and are off 62.4% from a year ago.
Regionally, the permits data is sort of opposite what we saw with starts. The worst-hit areas on a month-to-month basis were the West, down 6.7%, and the South, down 5.8%. In contrast, permits in the Northeast were unchanged, and building permits actually rose by 2.0% in the Midwest.
