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Housing Starts Strong Gainer

Washington — Supported by persistently low mortgage rates, the American housing market held relatively steady during October, but only the forward-looking measure of housing starts managed a strong gain, reversing a slide the prior month, while other sectors were virtually flat.

With builders regaining some of their confidence, housing starts improved by 6.4 percent, to a seasonally adjusted annual pace of 2 million units, recovering from a 6 percent decline during September, the U.S. Commerce Department reported.

The only other gainer during October was the highly volatile market for costly new home sales, subject to wide swings and frequent revision, which edged up just 0.2 percent during October, after dipping by 0.2 percent the prior month.

“Attractive interest rates coupled with an improving job market and increased household income are unquestionably the key factors that continue to drive buyer demand, said David Seiders, chief economist of the National Association of Home Builders. Builder confidence, said Seiders, remains strong about future prospects for the market.

The market for moderately priced existing single-family homes, by far the largest segment of the market, was virtually flat for the month, slipping by 0.1 percent, to a seasonally adjusted level of 6.6 million units from 6.7 million units in September.

David Lereah, chief economist of the National Association of Realtors, said sales, while dipping slightly in October, continue to exceed expectations. “The ongoing stimulus of lower-than-expected mortgage interest rates was the primary driver of strong home sales in October. Of course, all of the other market fundamentals remain sound, so we should only see a modest decline from record home sales this year if mortgage interest rates gradually rise.”

Housing By Region
Month-To-Month % Change

EXISTING HOME SALES HOUSING STARTS NEW HOME SALES
Source: U.S. Department of Commerce and National Association of Realtors
Northeast -1.3% 20.0% 19.7%
Midwest -2.8 8.6 -3.6
South 3.7 4.0 -9.1
West -3.6 5.0 12.7


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