The U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly announced the new residential construction statistics for October 2018:
Building Permits – Privately‐owned housing units authorized by building permits in October were at a seasonally adjusted annual rate of 1,263,000. This is 0.6 percent (±2.4 percent) below the revised September rate of 1,270,000 and is 6.0 percent (±1.6 percent) below the October 2017 rate of 1,343,000. Single‐family authorizations in October were at a rate of 849,000; this is 0.6 percent (±2.2 percent) below the revised September figure of 854,000. Authorizations of units in buildings with five units or more were at a rate of 376,000 in October.
Housing Starts – Privately‐owned housing starts in October were at a seasonally adjusted annual rate of 1,228,000. This is 1.5 percent (±12.9 percent) above the revised September estimate of 1,210,000, but is 2.9 percent (±10.4 percent) below the October 2017 rate of 1,265,000. Single‐family housing starts in October were at a rate of 865,000; this is 1.8 percent (±10.8 percent) below the revised September figure of 881,000. The October rate for units in buildings with five units or more was 343,000.
Housing Completions – Privately‐owned housing completions in October were at a seasonally adjusted annual rate of 1,111,000. This is 3.3 percent (±10.5 percent) below the revised September estimate of 1,149,000 and is 6.5 percent (±9.2 percent) below the October 2017 rate of 1,188,000. Single‐family housing completions in October were at a rate of 832,000; this is 1.2 percent (±10.6 percent) below the revised September rate of 842,000. The October rate for units in buildings with five units or more was 269,000.
Sales of newly built, single-family homes fell to a seasonally adjusted annual rate of 544,000 units in October after an upwardly revised September report, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. This is the lowest sales pace since December 2016. However, on a year-to-date basis, sales are up 2.8 percent from this time in 2017.
“The November reading is consistent with reports from our builders, who say that the job market and demographic tailwinds bode well for housing demand but rising interest rates and home prices are forcing customers to take a pause,” said Randy Noel, chairman of the National Association of Home Builders (NAHB) and a custom home builder from LaPlace, La.
“Policymakers should see this drop in sales as an indicator that housing affordability will continue to slow down the market.”
“Home sales declined this month as housing affordability continues to be a hurdle for consumers,” said NAHB Senior Economist Danushka Nanayakkara-Skillington. “While a solid economy and positive demographics support future demand for housing, it is critical to address this mounting affordability crisis.”
A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the October reading of 544,000 units is the number of homes that would sell if this pace continued for the next 12 months.
The inventory of new homes for sale rose to 336,000 in October. The median sales price fell 3.6 percent to $309,700, as the market is shifting to townhomes and other lower-cost houses.
Looking at the regional numbers on a year-to-date basis, new home sales rose 6.3 percent in the Midwest, 4.1 percent in the West, and 3.8 percent in the South. Home sales fell 17.1percent in the Northeast year-to-date.
It takes 400 tons of aggregates to construct the average modern home, according to the National Stone, Sand and Gravel Association.