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US home permits grow to 5-year high on apartments

Nov. 27, 2013 @ 07:03 AM

WASHINGTON — U.S. developers received approval in October to build apartments at the fastest pace in five years, a trend that could boost economic growth in the final three months of the year.

Permits to build houses and apartments were approved at a seasonally adjusted annual rate of 1.034 million, the Commerce Department said Tuesday. That’s 6.2 percent higher than the Sep­tember rate of 974,000 and the fastest since June 2008, just before the peak of the financial crisis.

Nearly all of the increase was for multi-family homes, a part of residential construction that reflects rentals and can be vola­tile from month to month. Those permits rose 15.3 percent to a rate of 414,000, also the fastest since June 2008. Plans for construction in the U.S. south drove much of the increase.

Permits for single-family houses, which make up roughly two-thirds of the market, rose 0.8 percent to a rate of 620,000. That’s still slightly below the August pace of 627,000. And it suggests that higher prices and borrowing costs are weakening buyer demand.

Data on homes started in October and September were not included in Tuesday’s report. Those figures have been delayed because of the government shut­down and will be released on Dec. 18 with the November home construction report.

The increase in permits sug­gests those figures will rise. And it indicates that “housing con­struction will make a much big­ger contribution” to economic growth in the final quarter of the year, said Ian Shepherdson, chief economist at Pantheon Macro­economics.
 

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