Housing Starts and Building Permit statistics for October were released today and showed an 11.7% drop from September.
Privately-owned housing starts in October 2010 were at a seasonally adjusted annual rate of 519,000. This is 11.7 percent below the revised September 2010 estimate of 588,000.
This is a surprise. Housing Starts jumped +10.5% in August 2010. Last month housing starts were revised to a -0.4% flatline from June. The change was all due to apartments, which increased 42.7% from last month.
Privately-owned housing starts in August were at a seasonally adjusted annual rate of 598,000. This is 10.5 percent (±11.9%)* above the revised July estimate of 541,000 and is 2.2 percent (±9.7%)* above the August 2009 rate of 585,000.
Single-family housing starts in August were at a rate of 438,000; this is 4.3 percent (±12.4%)* above the revised July figure of 420,000. The August rate for units in buildings with five units or more was 147,000.
Regionally, the new construction was happening in the West, with all regions having much higher 5 or more unit housing starts than single family. Here is a percentage breakdown of the nation's regions housing start totals:
The Pending Home Sales Index, a forward-looking indicator, dropped 30.0 percent to 77.6 based on contracts signed in May from a reading of 110.9 in April, and is 15.9 percent below May 2009 when it was 92.3. The falloff comes on the heels of three strong monthly gains as home buyers rushed to take advantage of the tax credit.
While this was expected, the 15.9% below May 2009 is the number to look at. Even more interesting while NAR reports:
The data reflects contracts and not closings, which normally occur with a lag time of one or two months. However, many closings have been delayed recently from a rush of buyers into the system and slow processing of short sales, in addition to the heavy volume and a more thorough loan underwriting process. As many as 180,000 buyers who signed contracts by April 30 may have missed the June 30 closing deadline for the tax credit.
The reality is Congress passed an extension of the homebuyer's tax credit, yet to be signed into law. CBS MarketWatch:
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