By Peter Ricci
Privately-owned housing starts in October rose 3.6 percent from September to an annual rate of 894,000, which is the highest rate since July 2008, according to new numbers from the U.S. Census Bureau.
That total was far above what analysts had predicted for housing starts, and it puts the homebuilding industry in an excellent position for both the new year and the spring homebuying season.
Housing Starts – Substantial Post-Boom Growth
October’s housing starts data is just the latest indicator of how far housing starts have traveled since collapsing during the housing downturn:
- Compared to October 2011, last month’s data represents a 41.9 percent increase.
- As with last month’s impressive data, the increase in housing starts was driven by the multifamily housing sector, which increased nearly 10 percent from September and has been on a tear for most of 2012, as this graph from Calculated Risk shows.
- Additional computations from Calculated Risk show that housing starts are now on pace to increase 25 percent from 2011, and single-family housing starts are also expected to increase by more than 20 percent.
- Overall, housing starts have increased by 87 percent from their bottom, and single-family housing starts are up 70 percent from the bottom. And as Bill McBride wrote on Calculated Risk, even with its gains, 2012 will be the fourth lowest year of housing construction since the Census Bureau began collecting data in 1959 – which means we can count on more growth in the coming months and years.
But for some builders, growth has been an ongoing feature of 2012. Brian Brunhofer, the president of Meritus Homes, said that in the markets he has current developments in, which includes Inverness, St. Charles and Park Ridge, he has been seeing a sustained level of interest from homebuyers.
“We have continued, over the last five months, to see increase levels of interest and activity,” Brunhofer said.
Part of that interest, Brunhofer continued, is because of low interest rates and higher consumer confidence, but an equally potent factor has been the general absence of new construction since 2008; prospective homebuyers, having exhausted the existing-home market, are now returning to the new-home market with renewed vigor, not that, for the first time in years, new homes are available to purchase!