U.S. housing starts surged to a one-year high last month, likely driven by fading disruptions caused by recent hurricanes in the South and communities replacing houses damaged by flooding.
All of this can create some positive trends for agents and brokers to keep a close eye on in the coming months.
According to a CNBC report, housing starts surged 13.7 percent to a seasonally adjusted annual rate of 1.29 million units, according to Commerce Department data, the highest level since October 2016.
According to the report, September’s sales pace was revised up to 1.135 million units from the previously reported 1.127 million units.
If your market is in the South, which accounts for almost half of U.S. residential construction, you’ve seen starts drop in the wake of Hurricanes Harvey and Irma. The storms slammed Texas and Florida in late August and early September.
The good news is that the region has bounced back, with housing starts in the South soaring 17.2 percent in October to 621,000 units. Of that, single-family construction vaulting 16.6 percent to its highest level since 2007.
The Midwest and Northeast markets also have seen increases in home building.
The increase in starts in October broke a streak of three consecutive months of decline. In 2017, home building has struggled with shortages of land and labor as well as expensive lumber.
Single-family home building, which accounts for the largest share of the housing market, increased 5.3 percent to a rate of 877,000 units in October, the highest level in eight months.
Building permits increased 5.9 percent to a rate of 1.297 million units in October, the highest level since January.
A bit of caution is mixed in as multi-family starts increased by 37 percent, adding a level of volatility to the data.
However, amid tight supplies any bounce in housing starts and building permits can signal a positive shift in your market, a trend worth watching.