According to the Commerce Department, building permits dropped for the fifth month in a row to the slowest pace in 14 years. This news accompanied a report that new construction of U.S. houses and apartments increased by 3% in October to a seasonally adjusted annual rate of 1.23 million in October. The increase brought a 3-month decline to an end. Estimated housing starts came in higher than the 1.17 million that economists expected, and September starts were revised up slightly to 1.19 million.
Building permits dropped 6.6% in October to a seasonally adjusted annual rate of 1.18 million from 1.26 million in September. October's level was the lowest for permits since July 1993. Building permits are a leading indicator of housing construction.
Digging into the numbers a bit, starts of large apartment units increased 44.4% in October to 345,000. This jump reversed a 35.9% decline from September. Starts of brand new single family homes logged their seventh-straight monthly decline, dropping 7.3% to 884,000 in October. During October, completions of homes increased 1.9% to 1.44 million. Compared to a year ago, housing starts dropped 16.4%, building permits were 24.5% lower, and completions were 25.2% lower. From January 2006's peak, housing starts have slipped 46.3%.