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October Housing Starts Galloping Toward a Rousing Finish for 2004

The government reported that starts rose 6.4% in October to a seasonally adjusted annual rate of nearly 2.03 million units, more than offsetting a dip during the previous month related to an unusually harsh hurricane season in the Southeast and Northeast regions of the country.

“This expected rebound virtually ensures that home builders will set a new record for single-family home production in 2004, and is an excellent sign of continued momentum in the overall housing market,” said NAHB President Bobby Rayburn.

Starts rose across the board in October, with substantial gains registered in both the single- and multifamily sectors as well as in every region of the country. Single-family starts climbed 5.7% to a seasonally adjusted annual rate of almost 1.65 million units, faster than the record pace of almost 1.5 million units for all of last year.

Multifamily starts last month bounced up 9.5% to a seasonally adjusted annual rate of 382,000, their strongest pace since last December of 2003.

“Excellent financing conditions are still the key to solid housing market performance, including much of the strength on the condo side of the multifamily market,” said NAHB Chief Economist David Seiders. “Improving economic conditions, particularly job and income growth, are additional factors in housing’s favor heading forward — and solid increases in house values continue to buoy demand.”

Regionally, starts gained 20% in the Northeast, 8.6% in the Midwest, 5% in the West and 4% in the South.

Issuance of building permits, which can be an indicator of future building activity, was virtually unchanged in October with a decline of less than 1% to a seasonally adjusted annual rate of 1.98 million units. Single-family permits declined 2.2% and multifamily permits rose 4.6%.

“This is a very positive report for housing and shows why builders are as optimistic as our latest surveys have indicated,” said Seiders. “The nation’s housing market is healthy, stable and headed for a strong finish in 2004.”

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