Housing Starts Increase 6.4 Percent in October

WASHINGTON D.C. - The Commerce Department said Wednesday that U.S. housing starts climbed a steep 6.4 percent to an annual rate of 2.027 million units in October, the fastest groundbreaking pace since December. Forecasters had looked for a more-moderate 1.975 million pace.

Single-family housing starts in October 2004 were at a rate of 1.645 million, a 5.7 percent increase above September's figure of 1.556 million. The October estimate for units in buildings with five units of more was 338,000.

?EUR??,,????'??This expected rebound virtually ensures that home builders will set a new record for single-family home production in 2004, and is an excellent sign of continued momentum in the overall housing market,?EUR??,,????'?? said Bobby Rayburn, president of the National Association of Home Builders (NAHB).

Regionally, starts posted the biggest gain, of 20 percent, in the Northeast, followed by an 8.6 percent boost in the Midwest, a 5.0 percent lift in the West and a 4.0 percent improvement in the South.

?EUR??,,????'??Excellent financing conditions are still the key to solid housing market performance, including much of the strength on the condo side of the multifamily market,?EUR??,,????'?? said NAHB Chief Economist David Seiders. ?EUR??,,????'??Improving economic conditions, particularly job and income growth, are additional factors in housing's favor heading forward - and solid increases in house values continue to buoy demand.?EUR??,,????'??

While housing starts rose sharply last month, permits - an indicator of builder confidence - dipped unexpectedly.

Permits slipped 0.7 percent to 1.984 million units. Single-family authorizations in October were at a rate of 1.525 million, which is 2.2 percent below the September figure of 1.559 million. Authorizations of units in buildings with five or more units were at a rate of 364,000 in October.

Privately owned housing completions in October were at a seasonally adjusted annual rate of 1.834 million. This is 2.7 percent above the revised September estimate of 1.785 million, and is 6 percent above the October 2003 rate of 1.731 million.