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.
Linda Marshall, the president of Linda Marshall Realtors, said that the new housing developments she has been working on, which are exclusively located in The Heights, are selling wildly – even though the foundations for some of the buildings have no even been set! Such is the demand for housing in Houston that construction cannot keep up.
“Everything I’m selling is before we’ve even cleared the lot,” Marshall said, adding that the units should be available within the next six months.
Development, however, will be sustainable, Marshall said, given how so many builders are sitting on vacant lots; one builder she works with, in fact, can build uninterrupted for the next two years, such is his inventory of lots.