New Home Construction Surged in October
November 18, 2020
Strong demand for housing caused construction of new homes to increase more than expected in October. Housing starts rose 4.9% to a seasonally adjusted 1.53 million units last month, the highest level since before the Great Recession. Economists had expected a more modest increase to 1.46 million units.
The surge was driven by starts on single-family homes, which increased by 6.4%. Construction of multi-family homes fell 3.2%. The shift in demand reflects a desire for many buyers to move away from cities and into the suburbs.
The report on new construction follows the National Association of Home Builders’ confidence index reaching a record high, indicating that builders expect construction to remain robust. Still, the industry remains hampered by the availability of materials and labor.