Groundbreaking on houses in the US increased more than expected in October, according to the Census Bureau’s monthly report.
Housing starts rose by 25.5% at a seasonally adjusted annual rate of 1.323 million, the biggest increase in nine years. Building-permit issuance rose 0.3% at a rate of 1.229 million.
“Housing starts are being driven higher by improved household growth as the economy promotes further job and income gains,” said David Berson, chief economist at Nationwide, in a note. “With improved employment and income prospects, millennials are an expanding portion of housing demand as they move out of their parents’ homes — increasingly to form families.”
Housing starts were strongest in the single-family homes segment of the market, where construction had not kept up with demand. Starts rose 10.7% at a pace of 869,000, the most since October 2007.
Multifamily units also bounced back after an unusually slow September.
Monthly housing data tend to be volatile and subject to revision, so these numbers may be changed next month.
Economists had forecast that housing starts rose by 10.4% at a rate of 1.156 million, while building permits fell 2.7% at a rate of 1.193 million.
Business Insider Emails & Alerts
Site highlights each day to your inbox.