New housing starts were higher than expected in October, largely driven by a rebound in multifamily construction.
Single-family construction, which represents the bulk of the U.S. housing market, remained weak.
Housing starts totaled an annualized rate of 1.23 million, up 3% from the revised September estimate, but down 16.4% below the rate a year earlier, the U.S. Census Bureau said Tuesday. Economists expected a rate of 1.18 million starts, according to estimates from Reuters.
While the data seem good for housing, the results held some peculiarities. As well, starts still remain far below their peak of 2 million annually, back in 2005.
"A lot of this rise was that multifamily fell so much last month," says Adam York, an economic analyst with Wachovia. "Single-family starts still aren't in good shape and probably have further room to fall."
In October, starts of multifamily homes jumped 47% sequentially, but that was measured against a 37% decline in September. Results for multifamily construction have varied wildly in recent months.
Single-family starts -- representing about 70% of housing construction -- fell 7.3% sequentially in October. That marked the seventh month in a row of single-family declines.
Building permits, an indicator of future construction starts totaled 1.18 million units in October, falling 6.6% from September and 24.5% from a year earlier. Economists expected 1.2 million permits.
The construction news came on the same day that
, the country's largest homebuilder by volume, recorded a
$50 million quarterly loss because of $278 million of inventory impairment charges related to the housing meltdown.
Also on Tuesday,
reported a $2 billion loss related to writedowns of its mortgage assets and higher provisions for credit losses. Freddie Mac, along with
are the largest purchases of home mortgages in the U.S.