U.S. Housing Starts and Permits (October 2024)

Homebuilding activity declined in October

• Housing starts fell 3.1% month-on-month (m/m) in October to 1.31 million (annualized) units, slightly below the consensus forecast. Revisions to the data for the two prior months added 17k units to the previous reported tallies.
• The decrease in housing starts was driven by the single-family segment which fell 6.9% m/m (or 72k units), while multi-family starts rose 9.7% m/m (or 30k units).
• Residential permits fell 0.6% m/m to 1.42 million annualized units. Single-family permits rose 0.5% m/m, reversing the prior month's decline, while multi-family permits fell 3.0% m/m to its lowest level in five months.
• Among the four Census regions, declines were recorded in the Northeast (-32.9% m/m) and South (-8.8% m/m), while gains were recorded in the West (+21.2% m/m) and Midwest (+9.4% m/m).

Key Implications

• Homebuilding activity fell in October as rising interest rates and the impacts of Hurricane Milton in the southeast constrained new projects. The larger single-family segment partially retraced its rebound of the prior two months while starts in the multi-family segment remained subdued despite the modest uptick. With the supply of single-family homes remaining near balanced territory and the multi-family supply pipeline moderating from its post-pandemic highs, starts should be primed to gradually rise through 2025 with the return of higher volume demand under lower rates.
• Homebuilder sentiment in the single-family market improved for a third consecutive month in November, as the Republican sweep of the White House and Congress boosted expectations for an easier regulatory environment in the coming year. However, this was partially tempered by the recent uptick in interest rates as financial markets pared back expectations for Federal Reserve rate cuts under a more accommodative fiscal policy environment. Homebuilding activity is expected to rise next year, but uncertainty related to the policies of the incoming administration may weigh on the industry over the near-term.  

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