U.S. residential construction experienced a sharper than anticipated decline in October, as detailed in a Tuesday report from the Commerce Department. The data reveals that housing starts decreased by 3.1% to an annual rate of 1.311 million following a 1.9% drop to a revised rate of 1.353 million in September.
Forecasters had anticipated a 1.8% reduction, projecting an annual rate of 1.330 million, starting from the initially reported 1.354 million for September.
Nancy Vanden Houten, Lead Economist for the U.S. at Oxford Economics, commented, "The dip in housing starts during October was slightly more than anticipated, partially due to the impact of Hurricanes Helene and Milton, which affected the South more significantly than we expected." She also expressed optimism for a recovery, stating, "Rebuilding efforts in the storm-affected areas should lead to a rebound in starts in the South."
The significant decline in housing starts was driven by a 6.9% drop in single-family starts, falling to an annual rate of 970,000. This decline overshadowed a 9.7% increase in multi-family starts, which rose to an annual rate of 341,000.
Additionally, the Commerce Department reported a 0.6% decrease in building permits, bringing them to an annual rate of 1.416 million in October, following a 3.1% reduction to a revised rate of 1.425 million in September. This indicator of future housing activity was projected to increase slightly by 0.1% to 1.430 million, compared to the earlier reported 1.428 million for the preceding month.
Single-family permits experienced a modest rise of 0.5% to an annual rate of 968,000, while multi-family permits saw a decrease of 3.0% to an annual rate of 448,000.
