After very weak numbers in September 2019, the number of construction permits and housing starts rose dramatically in October. This is a great sign in the field of new home construction.
This is according to data recently released by the U.S. Census Bureau and the Department of Housing and Urban Development. In addition to an increase in construction permits, new home completions (especially in the multi-family sector) were also quite strong in October.
Let’s take a look at some of the key facts and figures:
The number of housing permits issued was up 5% in October, compared to December. September saw a drastic 2.7% drop from August rate. What’s even more encouraging is that the October 2019 rate was up 14.1% compared to October 2018. These numbers were well above most housing analysts’ predictions and actually represent a 12-year high.
Housing starts represent the official beginning of construction on a new home or multi-family development. Housing starts were up 3.8% in October after a 9.4% drop in September. These numbers actually fell short of analysts’ predictions, but it’s still much better to see some growth than another big drop.
When looking at both housing permits and housing starts in October, both measurements found that multi-family construction was seeing a larger increase than single-family homes. All sectors saw increases in October after losses in September, along with significant year-over-year gains.
Rate of Completion
Another figure looked at is the annual rate of completion. This represents single-family residences and multi-family properties actually completing construction. The monthly rate of completion was up 10.3% in October while the annual rate was up 12.4% compared to October 2018.
The Northeast region of the United States saw the biggest permit, housing start and rate of completion increases, followed by the South. The West region, which San Diego is part of, only saw a slight increase in permits from September to October, but there was a major increase year-over-year. When it comes to starts and completion rates, both areas saw significant increases month-over-month and year-over-year in the West.
What Does it All Mean?
It’s important to look at new construction data like this. More new construction means more housing inventory, which will ultimately have a long-term effect on the overall real estate market. Low inventory has been an issue for awhile now, so it will be interesting to see what happens over time. Of course, what happens in the real estate market affects our mortgage market, so it’s good to know the trends and data that are shaping this part of our economy.
Whether you are buying a brand new home or resale property (or if you are ready to refinance), Transparent Mortgage is here to help with all your mortgage lending needs. Call us today at (619) 701-3906 or email me at email@example.com