Housing Starts Increase 10.8% : October Jump Biggest Gain in Seven Months

Housing construction jumped 10.8% in October, the largest increase in seven months, the government reported today.

The Commerce Department said single-family homes and apartments were constructed at an annual rate of 1.76 million units last month, up from a September rate of 1.59 million units.

Construction starts had fallen a sharp 8.7% in September, surprising many analysts who had been predicting an increase because mortgage rates have fallen to their lowest levels in five years.

Warren Lasko, executive vice president of the Mortgage Bankers Assn., predicted further increases in housing starts in the months ahead, reflecting the fact that interest rates dropped lower in November.

Lasko said that 30-year, fixed-rate mortgages are going for as low as 11.5% currently, far below their 1984 peak of 15.2%.

“The October increase was a performance that I believe can be sustained,” he said.