WASHINGTON – The pace of U.S. home building fell sharply in October as new home starts dropped 14.6 percent to their lowest level in over six years and building permits fell 6.3 percent, a government report showed on Friday.
The Commerce Department said October housing starts came in at an annual pace of 1.486 million units, compared with a pace of 1.74 million units in September. Economists had forecast October housing starts to fall to 1.690 million units from September's originally reported pace of 1.772 million.
Compared to a year earlier, October housing starts were down 27.4 percent from the October 2005 pace of 2.046 million units.
Permits for future groundbreaking, an indicator of builder confidence, fell 6.3 percent to an annual pace of 1.535 million units, the lowest rate since December 1997, from a 1.638 million pace in September. Economists had expected the Commerce Department to report October permits at a 1.625 million pace.
Permit applications were down 28 percent from October 2005.
Other data released this week painted a healthier picture of the nation's housing sector.
A private survey of U.S. homebuilders' sentiment ticked higher in November. The National Association of Homebuilders/Wells Fargo Housing Market Index on Thursday got a two-point bump to 33 points in November. The survey hit at 15-year low of 30 in September.
On Wednesday, the Mortgage Bankers Association reported that applications for U.S. home mortgages rose last week to their highest level since January as falling interest rates encouraged more loan refinancing.
The group's seasonally adjusted index of total mortgage applications increased 4.3 percent in the week ended Nov. 10 to 647.5, up 2.6 percent on the week.
Residential mortgage refinancing surged to its fastest rate since October 2005, the MBA said.