The Commerce Department reported(.pdf) that housing starts rose to their highest level since July 2008 and building permits saw their second highest reading in over four years as the homebuilding industry continues to rebound, capitalizing on the need for more rental housing and the lack of resale inventory.
Housing starts jumped 3.6 percent last month, from a downwardly revised annual rate of 863,000 units in September to 893,000 in October, and permits for new construction fell 2.7 percent, from September’s four year high of an 890,000 unit rate to 866,000. Current levels of homebuilding activity represent increases of 41.9 percent and 29.8 percent from year-ago levels for housing starts and permits, respectively.
The effect of Superstorm Sandy in the Northeast was said to be minimal and, though there was a sharp increase in single-family home starts the month prior, this category actually declined by 1,000 in the latest report as most of the gains were from new construction of housing with five units or more.
Nonetheless, the U.S. residential construction industry is clearly continuing to rebound, albeit from a very low base as shown above, both housing starts and permits still down by nearly 50 percent from what would be considered “normal”, prior to the housing bubble that began about a decade ago.