New construction of U.S. houses fell sharply in October to the lowest level in six months, the Commerce Department estimated Wednesday. Starts fell 10.6% in October to a seasonally adjusted 529,000 annualized units weaker than the 590,000 pace expected by economists surveyed by MarketWatch.
This is the lowest level since April. Starts of new single-family homes fell by 6.8% to 476,000 in October, while starts of large apartment units fell 34.6% to 53,000. Building permits, a leading indicator of housing construction, fell 4% to a seasonally adjusted annual rate of 552,000. This is the lowest level of permits since May.
While this is not good for Q4 GDP expectations (or housing companies), this IS good for the long term re-balancing between supply and demand that needs to take place.