U.S. Housing starts plunged in October to lower levels than was expected. There seems to remain a current slump in residential real estate and a stagnation with regard to new apartment construction.
Housing starts in the United States declined to far lower levels than expected in October, reflecting a struggling residential real estate market as well as an apparent slump in the construction of new apartment housing. Residential housing starts dropped a startling 11 percent last month, at an annualized rate of 1.6 million units.
The Commerce Department announced the figures on Wednesday, according to Bloomberg. The bright news, however, seems to be that permits for new single family construction rose to their highest levels since 2007. This signals that residential housing starts are poised to increase over the next few months.
Analysts as well as the federal government claim that the figures are not to be concerned about. They think that their declared strength in the job market and low cost loans will begin to re-fuel the housing industry in the near future. They also think that workers will begin to press for higher wages and that those will help to show more movement in the buying of residential properties.
Though residential real estate continues to be in flux, housing construction permits rose in October by 4.1 percent. This was in addition to a rise of applications for single family homes. Applications applied for in October came in at 711,000 which is the highest since the end of 2007.
Multi family units and apartment complexes seemed to almost grind to a halt in October. Construction on such units fell a whopping 25.1 percent in October. Even though this part of the industry always tends to lean toward volatility, it was still an unexpectedly large decline in work stoppages.
Many see that multi family construction has been nearly halted because of the current backlog in construction or these units and builders may not want to take on the expense of starting new projects. Only 722,000 single family units were built in October which was a decline of 2.4 percent. This was mainly due to the fact that single family construction has ground to a near halt in the South despite being vibrant in other parts of the country.