Housing permits improved for the second straight month in October but housing starts skyrocketed, rising 25.5 percent above September's level to a seasonally adjusted annual rate of 1,323,000 units.  The increase came on the heels of a 9 percent downturn in September when a 39 percent drop in multi-family starts offset what was an otherwise encouraging gain in the single-family sector.  That original estimate was revised slightly higher in today's report from the U.S. Census Bureau and Department of Housing and Urban Development, rising from 1,047,000 units to 1,054,000.  October's gain put housing starts on a pace 23.3 percent above that of October 2015.

The improvement in housing starts was broad based.  All four regions of the country posted double digit percentage gains.

The October surge was not a total surprise but still outpaced expectations.  Analysts surveyed by Econoday had been looking for an increase of 11.6 percent to a rate of 1,168,000 units.  The actual number was well above even the high point of estimates which ranged from 1,111,000 to 1,210,000.

Single family housing starts rose 10.7 percent month-over-month to a seasonally adjusted rate of 869,000, 21.7 percent above the rate a year earlier.  September housing starts were revised from 783,000 to 785,000. 

September's dreadful multi-family numbers did not change much on revision, rising from 250,000 units to 255,000, but starts in October more than compensated, gaining 74.5 percent to 445,000 units, 28.2 percent higher than the October 2015 rate.

On an unadjusted basis, there were 114,900 housing units started in October compared to 94,800 in September, with 73,500 of the starts single-family units, up from 67,700.  Multi-family starts increased by 15,000 to 40,500.

Housing permits, which had lagged in late summer, improved slightly on September's 6.3 percent gain, rising 0.3 percent to an annual rate of 1,229,000 units from 1,225,000 in September.  This was up 4.6 percent from the October 2015 estimate of 1,175,000 units.

Single family permits were at a seasonally adjusted rate of 762,000, a 2.7 percent change from September's 742,000 (revised from 739,000) figure and 5.1 percent higher than the prior October.  Multi-family permits fell 1.8 percent to 439,000 units, 5.8 percent above the October 2015 pace.

Analysts had expected permits to drop 2.9 percent to 1,190,000 units.  The range of estimates gathered by Econoday was 1,170,000 to 1,210,000 units.

On an unadjusted basis, there were 97.900 housing permits authorized in October, down from 107,700 in September.  Single-family permits numbered 60,500, down from 63,300.

Housing units were completed during the month at a seasonally adjusted annual rate of 1,055,000 units, 749,000 of which were single-family.  The total is a gain of 5.5 percent from September completions that were at the rate of 1,000,000 and 7.2 percent higher on an annual basis.  The single-family completion rate was 3.9 percent higher month-over-month and 17.0 percent year-over-year.  The rate of completions of multi-family units was 300,000 units, up 12.8 percent from September but 10.4 percent below the previous October.

There were 1,059,400 housing units under construction at the end of October, a non-seasonally adjusted number.  Of that number 451,900 were single-family units.  Permits had been issued for 125,700 housing units for which construction had not yet begun by month end; 63,800 were for single family units.

Housing permits in the Northeast plunged 21.1 percent from September levels and were down 19.2 percent year-over-year. The region, however, shared the jump in housing starts, up 44.8 percent for the month and 2.2 percent compared to the same month in 2015. The completion rate was down 19.6 percent and 32.8 percent from the earlier periods.

In the Midwest permits were up 12.1 percent for the month, and were running 15.9 percent above October 2015.  Housing starts jumped 44.1 percent and 24.4 percent compared to the earlier periods.  Completions rose 54.5 percent from September and 21.4 percent from the same month in 2015.

Permitting in the South fell off by 2.4 percent from the September pace and were down 4.2 percent from a year earlier, but starts were up significantly, rising 17.9 percent and 20.4 percent respectively. The completion rate was up 2.1 percent for the month and 10.1 percent annually.

The West remained strong; permits rose 7.5 percent compared to September and 28.4 percent year-over-year and starts were up by 23.2 percent and 40.2 percent.  Completions fell slightly from September, 1.2 percent, but remained 11.9 percent ahead of a year earlier.