October Housing Permits, Starts Miss Estimates Amid High Rates, Bearish Trends

Housing Starts Fall Below Expectations

Housing starts also disappointed, coming in at 1.311 million, below the consensus estimate of 1.34 million. This figure represents a 3.1% decline from September’s revised 1.353 million and a 4.0% decrease year-over-year from October 2023’s 1.365 million.

The single-family segment posted a sharp monthly decline of 6.9%, with starts falling to 970,000, signaling reduced builder activity amid high financing costs. Multi-family starts stood at 326,000, further illustrating sluggishness in larger-unit projects.

Housing Completions Outperform Year-Over-Year

October’s housing completions reached 1.614 million, coming in strong with a 16.8% increase year-over-year from 1.382 million in October 2023. However, completions were down 4.4% from September’s revised figure of 1.688 million, reflecting a gradual cooling in project finalizations.

Single-family completions remained steady at 986,000, a slight 1.4% dip from September. Multi-family completions, at 615,000, continued to show resilience compared to historical averages, supporting broader housing market supply.

Market Forecast

The October data presents a mixed picture. Both building permits and housing starts missed estimates, signaling reduced near-term construction activity. However, strong year-over-year gains in completions suggest that previously delayed projects are reaching the market, partially offsetting the impact of declining starts.

The short-term outlook for residential construction remains bearish. Elevated mortgage rates, coupled with declining permits and starts, point to headwinds for construction-related equities and commodities like lumber. Builders may further slow activity to avoid oversupply risks in a high-cost environment.