November 20, 2018

US home construction rises 1.5 percent in October

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U.S. home construction improved a slight 1.5 percent in October, but in a troubling sign, ground breakings for single-family houses fell.

The Commerce Department said Tuesday housing starts rose to a seasonally adjusted annual rate of 1.23 million, up from 1.21 million in September. The gains came entirely from apartments. Starts for single-family houses slipped 1.8 percent last month.

Housing has stumbled in recent months as mortgage rates have climbed, putting the ability to buy a home or move up to a nicer property out of reach for more Americans. A sharp increase in mortgage rates has led to a marked decline in home construction since May, such that ground breakings have fallen 2.6 percent over the past 12 months.

“The housing construction cycle has peaked, but we’re not expecting a meltdown,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

Some construction in the South might have been disrupted by Hurricane Florence striking the Carolinas in September and Hurricane Michael then hitting Florida and Georgia in October. But ground breakings recovered somewhat in the South last month, increasing 4.7 percent.

Homebuilders are feeling slightly less confident, even if they expect to keep building.

Keep reading on APnews.com

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