Single-family housing starts fell to an annualized rate of 436,000 units in October, a near low that comes despite rock bottom mortgage rates. It appears that trouble is also brewing in the multifamily sector, which had shown strength in recent months.
According to figures compiled by the Commerce Department and HUD, single-unit starts fell 1% from September, but 8% compared to the same month a year ago.
Multifamily starts came in at just 74,000 units annualized, a 48% plunge from September.
"The construction industry remains mired in muck," said Mike Larson, a real estate analyst at Weiss Research. "Starts fell off the table in October, led by the volatile multifamily sector, while permit issuance continues to bounce around at depressed levels."
Larson added that the poor showing should come as a surprise to no one. "We have so many existing, distressed homes for sale already, and even more will hit the market once various foreclosure moratoriums expire," he said.
All housing starts (both single- and multifamily) plummeted 11.7% to a 519,000 annual rate from a downwardly revised 588,000 in September, the worst reading in 18 months.
Some economists were anticipating a robust number in the range of 600,000.
There was one hopeful sign in the numbers: inventories of completed but unsold homes fell to a low 79,500, suggesting the drag from an overhang of unsold homes might be lightening.
