U.S. housing starts up slightly

Housing starts inched up 0.5 percent in September to 590,000 units, pushed up by single-home construction, which rose by 3.9 percent.

However, initial construction of multifamily homes fell 15.2 percent, to 89,000 units, the second-lowest reading since 1959, according to the U.S. Department of Commerce.

Housing starts were down 28.2 percent, year-over-year.

Housing permits, a gauge of future construction, fell 1.2 percent to an annual pace of 573,000 units in September. Single-family permits dropped 3 percent.

Builders appear to be holding off on new construction, as uncertainty looms over the possible extension of the $8,000 tax credit for first-time homebuyers.

This tug-of-war between the effects of the tax credit and low inventories may continue for a few months, but eventually, low inventories will win out,” noted Patrick Newport, an economist with IHS Global Insight.

“Low inventories will require that builders ramp up production, which means that the job losses in the residential construction sector will soon turn into job gains,” he said.

Source: South Florida Business Journal