U.S. home construction reaches strongest pace in a year, but falls in the West

In this Thursday, June 1, 2017, photo, builders work on the roof of a home under construction at a h
A builder works on the roof of a home under construction in Jackson Township, Pa.
(Keith Srakocic / Associated Press)

Construction of new homes in the United States climbed 13.7% in October, the biggest jump in a year, as builders broke ground on more apartments and single-family houses. But the increase wasn’t spread nationwide: Construction declined in the West.

The Commerce Department said Friday that the monthly gain put U.S. housing starts at a seasonally adjusted annual rate of 1.29 million units. That is the best pace for home construction in 12 months.

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Housing starts have risen just 2.4% year-to-date, largely because fewer apartment complexes are being built. Construction of single-family houses has driven much of the growth this year, a sign of greater demand from buyers in a healthy job market.


But recent building trends reversed somewhat in October, with most of the momentum coming from apartment construction. The building of multi-family properties jumped 37.4% in October. Construction of single-family houses increased 5.3%.

Still, the building of new homes has done little to alleviate the growing shortage of existing homes for sale. This shortage has started to stifle the broader real estate market. Purchases of existing homes have fallen over the past 12 months, according to the National Assn. of Realtors. The decline largely reflects that there are 121,600 fewer homes on the market during the same period, a 6.4% decrease that new construction has been unable to offset.

“For a significant increase in new homes, municipalities are going to have to work harder to make more land available for building,” said Robert Frick, a corporate economist with Navy Federal Credit Union.

Construction in the South rose 17.2% last month compared with the month before, a sign the region is regaining its footing after damage from hurricanes Harvey and Irma. Home construction shot up 42.2% in the Northeast thanks to groundbreakings for apartments. Construction increased 18.4% in the Midwest, but it declined 3.7% in the West.


Building permits, an indicator of future construction, rose 5.9% in October to 1.3 million.


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