Last month's unexpected plunge in multi-family housing starts, allegedly the result of hurricane flooding aftereffects in the several key southern states has been fully recovered in the latest data reported by the Census bureau, which saw a 74.5% surge in multi-family starts in October, a rebound from 255K to 445K. However it was the far more surprising surge in single-family units in October, which spiked by 10.7% from 785K to 869K, a new post-crisis high, that was the most surprising data point in the notorious volatile series.
As a result, total housing starts soared by 25.5% sequentially in October, the biggest one month surge since July 1982, spiking from 1,054K to a whopping 1,323K - the highest print in nine years - smashing expectations of 1,156K, driven by surges across virtually all regions, but most notably the Northeast and Midwest, where starts soared by more than 44%, while starts in the South and West rebounded by 17.9% and 23.2% respectively.
The perplexing surge in context:
We say perplexing because as we noted yesterday, the surge comes just in time for the collapse in mortgage applications which have recently plunged by 30%, dropping to the lowest level since March as a result of rising yields, a trend that is likely to persist should interest rates keep rising.
On a year over year basis, the October rebound was a massive 23.3% jump, the highest going back to February's 34.8%.
While housing starts were clearly on fire and likely to be revised substantially lower in future months, permits were far more tepid rising just 0.3% from 1,225K to 1,229K, an odd discrepancy between the series, especially since permits traditionally leads starts. More curious: Multi-family permits declined by 1.8% offset by a 2.7% jump in single family units from 742 to 762K.