An important economic indicator was released today by the United States Census Bureau -- the Housing Starts report. This economic report tells us how many permits were approved in October 2005 to build new homes in comparison to September 2005 and October 2004.

For October 2005, the U.S. Census Bureau and Department of Housing and Urban Development announced that privately-owned housing starts were at a seasonally adjusted annual rate of 2,014,000. In comparison to September's estimate of 2,134,000, this is a 5.6% decline. It also represents a 2.3% drop below the October 2004 rate of 2,062,000.

Bob Walters, Chief Economist for the nation's largest online lender, Loans, cautions that there have been single-month declines in housing starts in the past, only to be followed by spikes in the following month. "As long as rates stay at historically low levels and the economy continues to create jobs, home sales will remain strong," says Walters. According to Walters, only after several consecutive months with a significant decline in housing starts could one begin to make the argument that the housing market is softening; however he does not foresee that occurring anytime in the near future as 1.2 million net new households are projected to be formed every year for the next 22 years.

Publish Date: 11/17/2005