US housing starts rise to 9-year high in October

Jump from previous month was quickest since 1982
November 17, 2016 04:30PM

U.S. Secretary of Commerce Penny Pritzker and rendering of 340 Flatbush Avenue Extension (Credit: SHoP Architects)

U.S. Secretary of Commerce Penny Pritzker and rendering of 340 Flatbush Avenue (Credit: SHoP Architects)

From the New York website: New-home construction climbed to a nine-year high last month on the back of a big jump in apartment developments and strong growth in single-family housing.

Residential starts jumped 25.5 percent in October to 1.32 million seasonally adjusted units, the most new construction starts since August 2007, according to a U.S. Commerce Department report released Thursday.

The increase from September was the largest on record since July 1982, Bloomberg News reported. Multifamily building construction spiked an astounding 68.8 percent. Single-family homebuilding rose 10.7 percent.

Job growth and stronger finances have been driving demand, but increases in borrowing costs could discourage first-time buyers.

“Homebuilding is in a steady recovery,” said Richard Moody, chief economist at Regions Financial Corp. in Alabama. “The fundamentals for demand are in good shape” although “higher mortgage rates could be a potential headwind if we see further gains in rates.”

Investors are expecting quicker expansion and inflation from President-elect Donald Trump. That’s pushed the yield on the U.S. 10-year note to jump in the past week, and indicator of changes in mortgage rates.

In areas of New York City, particularly Downtown Brooklyn, a glut of new rental projects is expected to come online. [Bloomberg]Rich Bockmann