Housing Starts at Highest Rate Since 1986

Nov. 19, 2003

WASHINGTON (Reuters) - Builders broke ground for new U.S. single-family homes and applied for permits to build them at record high paces in October, as persistently low mortgage rates fueled an unflagging housing market, a government report showed on Wednesday.

Total U.S. housing starts jumped 2.9 percent to a seasonally adjusted annual rate of 1.960 million units in October from an upwardly revised 1.905 million pace in September, hitting the highest pace since January 1986. Starts well exceeded the expectations of analysts polled by Reuters, who had forecast a 1.850 million unit rate.

Single-family starts surged 5.7 percent to 1.617 million units, the highest pace on record. Total permits, an indication of builder confidence in future sales, climbed 5.2 percent to 1.973 million authorizations to build, the highest rate since February 1984.

Permits to build single-family homes rose 3.2 percent to 1.535 million units, the highest on record.

Mortgage rates have hovered not far above four-decade lows as the Federal Reserve stresses it will not raise official interest rates for some time. Low rates and slim inventories of homes available for sale have fueled strong demand for housing.

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