U.S. Building Permits Jump To Five-Year High In October

(RTTNews) - While the Commerce Department released a report on Tuesday showing that U.S. building permits came in well above economist estimates in the month of October, the release of data on housing starts was once again delayed as a result of the recent government shutdown.

The Commerce Department said building permits climbed 6.2 percent to an annual rate of 1.034 million in October from the September rate of 974,000. Economists had expected building permits to come in at an annual rate of 930,000.

The increase, which followed a 5.2 percent jump in September, lifted building permits to their highest level since June of 2008.

However, the report showed that the jump in building permits was largely due to strength in the volatile multi-family sector.

Permits for multi-family homes surged up by 15.3 percent to an annual rate of 414,000 in October after soaring 20.1 percent to an annual rate of 359,000 in September.

Single-family authorizations edged up by a more modest 0.8 percent to a rate of 620,000 in October from the September figure of 615,000.

Peter Boockvar, chief market analyst at the Lindsey Group, said, "A recovery is in place for single family but the path will remain lumpy as historically is the case after a bubble pops and buyer attitudes remain highly sensitive to mortgage rates, income growth and tight lending standards."

"The continued strength in multi-family building though reflects the secular shift in homeownership rates finally back to its 50 year average of 65.4% vs. the peak of 69.2% in June '04," he added.

Meanwhile, the Commerce Department said the government shutdown affected the data collection schedule, preventing accurate data for September and October to be collected in time for the release.

Data on housing starts in September, October, and November will subsequently all be released together on December 18th.