Privately-owned housing starts rose to their highest level in more than four years, as the homebuilding market continued to show strong improvements.
By Peter Ricci
Privately-owned housing starts in October rose 3.6 percent from September to an annual rate of 894,000, which is the highest rate since July 2008, according to new numbers from the U.S. Census Bureau.
That total was far above what analysts had predicted for housing starts, and it puts the homebuilding industry in an excellent position for both the new year and the spring homebuying season.
Housing Starts – Substantial Post-Boom Growth
October’s housing starts data is just the latest indicator of how far housing starts have traveled since collapsing during the housing downturn:
- Compared to October 2011, last month’s data represents a 41.9 percent increase.
- As with last month’s impressive data, the increase in housing starts was driven by the multifamily housing sector, which increased nearly 10 percent from September and has been on a tear for most of 2012, as this graph from Calculated Risk shows.
- Additional computations from Calculated Risk show that housing starts are now on pace to increase 25 percent from 2011, and single-family housing starts are also expected to increase by more than 20 percent.
- Overall, housing starts have increased by 87 percent from their bottom, and single-family housing starts are up 70 percent from the bottom. And as Bill McBride wrote on Calculated Risk, even with its gains, 2012 will be the fourth lowest year of housing construction since the Census Bureau began collecting data in 1959 – which means we can count on more growth in the coming months and years.
Ralph De Martino, the president Ocean International Realty Miami Beach and a past president of the Miami Association of Realtors, said that he has definitely observed a heightened level of construction in Miami’s condo market.
“It’s evident that the players in the development arean have been jumping into the market,” Martino said, given the high demand from homebuyers (particularly foreign homebuyers) for Miami’s housing stock.
The high levels of development, Martino continued, have represented a sort of pendulum for Miami’s housing market; after there being no construction in the years following the downturn, all new-home opportunities dried out, and now that demand is so high, builders are sprinting to build new units.
“For years, the faucet was shut off,” he said.