Housing Starts Drop Sharply in October

Washington, DC, Nov. 18, 2009--Housing starts fell a sharp 10.6% in October, the Commerce Department reported Wednesday, representing a blow to recent growing optimism in the housing sector.

New construction dropped to a seasonally adjusted annual rate of 529,000, the lowest level since April. The 10.6% drop was the biggest percentage decline for starts since January.

Both single-family homes and multifamily units declined in October.

Prior to the October decline, housing starts have been flat for four straight months, on the heels of a big rebound earlier in the year from historic lows for the home-building industry.

Economists were expecting a rate at around a 590,000 units.

Starts had been steady around the 590,000 level for the past four months. September starts were revised higher, to a 592,000 pace from 590,000 previously reported.

Starts of single-family homes fell 6.8% on the month to a 476,000 rate, while starts of multifamily units dropped 34.6% to 53,000.

In the past year, starts are down 30.7%. Starts of single-family homes are off 10.9%, while starts of apartments and condos have plunged 78.1%.

Meanwhile, building permits fell 4% to a seasonally adjusted annual rate of 552,000 in October.

Building permits for single-family homes eased 0.2% to a 451,000 rate. Many economists consider single-family permits to be the most important number in the government's release.