Housing Starts Down 5.6 Percent in October

Privately-owned Housing Starts in October were at a seasonally adjusted annual rate of 2,014,000, a 5.6 percent decline from September's figure of 2,219,000. Single-family housing starts in October 2005 were at a rate of 1,704,000, 3.7 percent below September.

Building permits issued also declined in October. Overall permits issued totaled 2,071,000, a 6.7 percent decline from September. Of those, single family permits were 1,681,00, a decline of 4.9 percent.

"Builders continue to operate at a very healthy pace, but we are well aware that some slowing of demand is inevitable following the record-breaking sales activity that has prevailed recently," said Dave Wilson, president of the National Association of Home Builders (NAHB) and a custom home builder from Ketchum, Idaho. "NAHB's November survey of single-family builders showed a significant slowdown of sales activity."

"It appears that housing starts and permit issuance hit their peaks during the third quarter and that housing market activity has begun to cool," said NAHB Chief Economist David Seiders. "Rising house prices and interest rates have combined to erode housing affordability and consumers also appear to be concerned about the cost of heating their homes this winter."