Yes, Housing Starts Surge, but Rentals Are the Drivers
By Diana Olick, CNBC Correspondent
NEW YORK ( CNBC) -- The headline number for housing starts was big, exceeding expectations and sending the home builder stocks on yet another tear.
Starts hit 894,000 (annualized) in October, over 50,000 more than the analysts forecast. Housing starts are now at their highest level since July 2008.
"We expect the builder equities will react positively initially, but then fade through the day once the report is fully digested as 'multifamily' was the key driver of the results," warned Stephen East at ISI.There is no question that home builders are benefiting from tight supply in the existing home market and overall improved consumer confidence. That was apparent in the home builder confidence numbers released this week, which hit the highest level in six years.
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