U.S. home construction dips 0.7% in October, but permits jump

<p><p>SILVER SPRING, Md. — Construction of new homes in the U.S. fell 0.7% in October, but a big jump in the number of permits last month points to anticipation by builders that supply chain problems that have dogged them for much of the year will soon ease.</p></p><p><p>October’s decline put home construction at a seasonally adjusted annual rate of 1.52 million units, which is an increase of 0.4% from the rate at this time last year, the Commerce Department reported Wednesday.</p></p><p><p>September’s number was also revised down to 1.53 million units from 1.56 million units.</p></p><p><p>But in a positive sign of future activity, applications for building permits jumped 4% from September to 1.65 million and is up 3.4% from October of last year.</p></p><p><p>Single-family home starts fell 3.9% from September to October and are down more than 10% from last year.</p></p><p><p>Apartment construction has helped offset some of those declines, with starts of buildings with five or more units rising to 470,000 in October, an increase of 6.8% from September’s 440,000.</p></p><p><p>Apartment construction starts are up nearly 40% over this time last year.</p></p><p><p>Construction activity by region saw modest declines in the Northeast, South and West, while the Midwest came in 5.6% higher in October.</p></p><p><p>Low interest rates and a desire for more space have lured buyers into the market, but rising costs for materials and a years-long shortage of supply have pushed prices up.</p></p><p><p>Economists and builders say demand remains strong, even as the median price for a new home is about 20% higher than a year ago.</p></p><p><p>A monthly survey of builder sentiment by the National Association of Home Builders and Wells Fargo showed sentiment improved to 83 in November from a reading of 80 in October, which was also an increase over September’s 76.</p></p><p><p>The index hit a record reading of 90 last November.</p></p><p><p>The Commerce Department issues its report on new home sales for October later this month.</p></p><p><p>In September, it reported that sales of new homes jumped 14% in September to the fastest pace in six months as strong demand helped offset rising prices.</p></p>