More applications for home construction were issued in October than at any time in the past five years, a sign the U.S. residential real-estate market is gaining momentum heading into 2014 according to Bloomberg.
Building permits increased 6.2 percent in Oct. to a 1.03 million annualized rate, the most since June 2008, after a Sept. pace of 974,000, figures from the Commerce Department showed. The median estimate of 47 economists surveyed by Bloomberg was for a 930,000 rate. Figures for housing starts, which usually accompany the permits data, are delayed until Dec. 18 because last month’s government shutdown prevented the agency from gathering the data in time.
The improvement over the past two months was paced by a surge in applications for multifamily housing that indicates growing demand for either rental units or condominiums. Improvement in the housing market may continue as a pickup in employment offsets higher borrowing costs, rekindling demand for new homes as existing inventories remain tight.
“The economy is getting better,” said Brian Jones, senior U.S. economist as Societe Generale in New York, whose forecast for a rate of 985,000 permits was the highest in the Bloomberg survey. “Certainly the multi-family numbers are telling you it’s time to build.”
Permits for multifamily units climbed 15.3 percent in October to a 414,000 pace, the most since June 2008, and followed a 20.1 percent jump in September. Excluding a surge related to a change in New York City’s building code that took effect in July 2008, applications would have been the strongest since November 2007, the month before the last recession began.
Single-family building permits climbed 0.8 percent last month to a rate of 620,000.
The Commerce Department is postponing the release of housing starts data due to the government shutdown, the agency said last week in an emailed statement. November permits data will also be released Dec. 18, along with starts for that month and the previous two.
On a year-to-year basis, building permits were up 13.9 percent last month.