Multifamily Starts Fall, but Rebound Likely
Housing starts in buildings with five or more units fell by more than 11% in October. For the month, the Census Bureau's preliminary (seasonally adjusted annual) starts rate came in at 271,000, compared to 307,000 for September and 319,000 in August. As usual, caveats about reading too much into a one-month change for a series that fluctuates and is subject to revisions apply. The August and September numbers were both revised upward this month, for example, even after the preliminary August figure was revised upward by more than 40,000 apartments last month. Moreover, the last two times we saw double-digit declines, they were followed immediately by double-digit increases the following month.

Source: U.S. Census Bureau; NAHB Economics Group

The Census Bureau so far has maintained that the impacts of Hurricane Katrina are minimal, on both the reliability of its estimates, as well as on the rates of housing starts and permit authorizations it reports. In permit-issuing places that were affected by the damage and could not be contacted, the Census  Bureau assumed no new permits were issued, and that  projects previously authorized had not been started yet. In general, the survey used to generate multifamily starts and other measures of residential construction does not include very many of the places that have experienced severe hurricane damage since August. [ return to top ]