Live

Watch CBSN Live

Housing Starts Hit Unexpected High

Construction of new homes and apartments rebounded strongly in October as builders in the South worked overtime to make up for time lost to Hurricane Georges.

Nationally, builders started work on new housing units at a seasonally adjusted annual rate of 1.695 million last month, up 7.3 percent from September, the Commerce Department said on Thursday.

The increase, the largest in 14 months, returned starts nearly to the 1.704 million rate of July, an 11-year high.

  • In the South, starts surged 14.5 percent to an annual rate of 820,000 units, the most in nearly 13 years. Starts in the region had sagged 7.7 percent the month before when the hurricane set back builders in Mississippi, Louisiana, and elsewhere.
  • In the Northeast, starts jumped 16.5 percent, to a rate of 162,000 units, the most in 11 months.
  • In the Midwest, starts jumped 6.9 percent, to a rate of 352,000, the highest in eight months.
  • In the West, they dropped 11.1 percent (the sharpest decline in almost two years) to a rate of 361,000.
Nationwide, low mortgage rates, strong income growth, and a plentiful supply of jobs have contributed to the strongest year for housing construction since the mid-1980s.

Analysts expect another good year in 1999, although with overseas economic turmoil causing job losses in U.S. manufacturing, activity won't be as brisk as this year.

In October, much of the strength came in apartment building, up 23.6 percent to a rate of 409,000 units. The start rate for buildings with at least five units, 371,000, was the highest in nearly nine years.

However, single-family construction also appeared healthy, rising 3 percent to a rate of 1.286 million.

Housing permits, a gauge of future construction, jumped 9.9 percent in October to a rate of 1.697 million, the most since January 1990.

Written by Dave Skidmore

View CBS News In
CBS News App Open
Chrome Safari Continue