Highlights
New residential construction essentially held steady in October but homebuilders may be increasingly optimistic as housing permits jumped. Housing starts in October nudged back only 0.3 percent, after rebounding a sharp 7.7 percent the prior month. The October annualized pace of 0.628 million units beat analysts' estimate for 0.605 million units and is up 16.5 percent on a year-ago basis. The dip in October was led by an 8.3 percent decline in the multifamily component, following a 35.0 percent spike in September. The single-family component rebounded 3.9 percent after a 2.6 percent decrease the month before.

By region, the decrease in starts was due to a 16.5 percent drop in the West. Other regions gained with the Northeast up 17.2 percent; the Midwest up 9.7 percent; and the South up 1.6 percent.

It is not gangbusters but it certainly is an improvement for future construction as housing permits jumped 10.9 percent after declining 5.8 percent in September. But the optimism is mainly for multifamily construction. The October rate of 0.653 million units annualized posted notably higher than the consensus forecast for 0.605 million. Permits in October are up 17.7 percent on a year-ago basis.

For the latest month, multifamily permits gained 24.4 percent while single-family permits rose 5.1 percent. On a year-ago basis, multifamily permits are up 48.0 percent while single-family permits are up 6.6 percent. Homebuilders clearly are more optimistic about the multifamily sector than single-family. Apparently, excess supply is still somewhat an issue for the single-family sector, along with continued soft demand.

On the news, equity futures rose somewhat (less negative) with a dip in initial jobless claims also contributing.

Market Consensus before announcement
Housing starts in September rebounded a sharp 15.0 percent after declining 7.0 percent the month before. The September annualized pace of 0.658 million units was up 10.2 percent on a year-ago basis. The comeback in September was led by a monthly 51.3 percent surge in the multifamily component, following a 16.8 percent drop in August. The single-family component edged up 1.7 percent after a 2.8 percent decrease the month before. By region, the jump in starts was led by an 18.1 percent increase in the West. Other regions also gained with Northeast up 12.7 percent; the Midwest up 9.3 percent; and the South up 15.7 percent. Only the increases in the Northeast and South were partially related to rebounding from hurricane effects in August. Housing permits edged slipped 5.0 percent after rebounding 4.0 percent in August. The September rate of 0.594 million units annualized was up 5.7 percent on a year-ago basis.

2011 Release Schedule

Released On: 1/19 2/16 3/16 4/19 5/17 6/16 7/19 8/16 9/20 10/19 11/17 12/20 Release For: Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov