November 17, 2017 – Housing starts track the number of new residential construction projects underway over the course of a month. This indicator has implications for demand in construction spending/jobs, consumer wages, and complimentary sectors such as durable household item sales. Along with building permits, housing starts is considered a leading economic indicator.
Housing starts jumped in October to an annualized rate of 1.290 million, well above expectations of an annualized rate of 1.190 million and above September’s revised rate of 1.135 million. Single-family starts were up 5.3% while single-family completions were up 2.6%. Multi-family starts also jumped 36.8% to 413,000. Permits for single-family homes rose 1.9% along with multi-family permits rising 13.9% in October.
The sizable jump in housing starts is due to increases in every region across the U.S. The West reported the highest monthly percent gain from September to October increasing a seasonally adjusted 13.0%. Following the West, the Northeast, Midwest, and South all increased 4.1%, 3.8%, and 3.0% respectively. People have confidence the economy is strong and believe when they start construction on a house it will be completed. This confidence carries through to construction companies and home builders being put to work and money flowing into the economy in the form of salaries and wages as well as building material sales.