WASHINGTON — The U.S. housing permits data through October were stronger on their face, but underneath suggest still-cautious demand for single-family homes.
Permits had surges in September and October, with the October tally up 6.2% to 1.034 million, September up 5.2% at 974,000, and August revised higher to 926,000. The numbers have returned to the highs of the spring, suggesting further housing growth.
The government shutdown meant that, in addition to this being a two-month's span for the release, the housing starts and completions estimates, which usually accompany this report, have been delayed. These data most likely will be released later via the Internet.
However, most of the gain remains in multi-units. This might be considered speculative or related to individuals' reluctance to buy.
Single-family permits were 620,000 in Oct, after 615,000 in September, and 627,000 in August. This is about where they stood after an advance in the spring.
It could be that higher interest rates and slow income growth continue to constrain underlying home buying. Household formations remain low and thus demand for homes is running below its norms. Single family permits peaked at 1.798 million in September 2005.
By region, permits were gaining in the South and West, but mostly lower in the Northeast and Midwest. Permits were up 9.4% in the South, up 15.4% in the West, flat in the Northeast where singles were down 1.8%, and off 9.6% in the Midwest where singles were 7.5% lower.
The Commerce Department did not report any glitches in the data collection from the shutdown other than the delay in getting the report out. September data were in fact more accurate: they included late reports and corrections that normally would have been included in later revisions.
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