October’s rebound in single-family starts masked deeper caution across housing
US housing construction in October offered a split screen for mortgage and housing professionals, with single-family starts rebounding even as overall building activity and permits softened.
According to the US Census Bureau’s latest New Residential Construction report, privately owned housing starts were at a 1.246 million annual rate in October, down 4.6% from September and 7.8% below a year earlier.
Single-family starts, which made up most activity, increased 5.4% to a seasonally adjusted annual rate of 874,000 units in October, after dropping to 829,000 in September. Starts for buildings with five or more units were 347,000, pulling total construction to its lowest level since the onset of the pandemic.
Permits and sentiment point to caution
The data shows that builders kept slowing projects in the fall, shortening build times and cutting costs while they waited for demand to come back. The National Association of Home Builders/Wells Fargo confidence index stood at a weak 39, meaning more builders viewed conditions as poor than good, since any reading below 50 signals negative sentiment.
Building permits, a forward-looking gauge, slipped. Privately owned permits ran at a 1.412 million annual pace in October, 0.2% below September and 1.1% under October 2024. Single-family authorizations were 876,000, 0.5% below the revised September figure of 880,000, while permits for buildings with five or more units came in at 481,000.
Completions highlight supply pipeline
Completions stayed comparatively firm, suggesting a still-steady flow of units into the market. Total housing completions were 1.386 million in October, 1.1% above September but 15.3% below a year earlier.
Single-family completions were 1.009 million, which is 6% above the revised September rate of 952,000, with 367,000 units finished in buildings with five or more apartments.
Broader affordability and policy crosswinds
US president Donald Trump recently proposed banning institutional investors from purchasing single-family homes, and asked Fannie Mae and Freddie Mac to purchase $200 billion in mortgage bonds to help drive down borrowing rates. These ideas have not been enacted and remained politically contested at the time of the data release, and the size and impact of any such program has yet to be seen.
Permits for future construction told a similarly cautious story. Total building permits edged down 0.2% in October to 1.412 million, with single-family authorizations slipping 0.5% to 876,000.
Despite forecasts that housing starts would hover near 1.3 million annually into 2026, elevated mortgage rates and locked-in low-rate borrowers continued to constrain turnover and new loans.
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