US Housing Starts Drop As Permits Rise to 6 Year High

U.S. housing starts unexpectedly fell in October, but a jump in permits to near a 6-1/2-year high suggested the housing market was steadily regaining strength.
Groundbreaking slipped 2.8 percent to a seasonally adjusted annual 1.009 million-unit pace, the Commerce Department said on Wednesday. September’s starts were revised up to a 1.038 million-unit rate.

Economists polled by Reuters had forecast starts rising to a 1.025-million unit rate from September’s previously reported 1.017-million unit pace.

The volatile multifamily homes segment accounted for the decline in housing starts last month. Starts for single-family homes, the largest part of the market, rose for a second straight month to their highest level in nearly a year, a good omen for housing.

While residential construction, home builder sentiment and sales have been trending higher in recent months, sluggish wage growth and stringent lending practices by financial institutions continue to constrain activity.

Still, home building is expected to contribute to gross domestic product in the fourth quarter after being neutral in the July-September period.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza