U.S. housing starts seem to have dropped in November

The U.S. housing starts are expected to have dropped in November after rising sharply in October. Housing starts had surged 25.5 percent to 1.323 million units in October, the highest level since 2007, as one-unit starts rose 10.7 percent and groundbreaking activity on apartment buildings climbed 68.8 percent.

Given that the percentage gain in housing starts was the biggest since July 1982, and that it was mainly because of the volatile multi-family sector, starts in November are expected to have reversed a part of their October gains, possibly falling to around 1.220 million units, noted Societe Generale in a research report.

While the rise in multi-family starts was eye-popping, the level of multi-family starts actually averaged 440,000 from June to August before falling to 296,000 in September. The October level of 454,000 puts multi-family starts just modestly above the levels that the series had been registering in the summer. The larger surprise was in the one-family sector, where the 869,000 units reading of October was the highest since October 2007. The rise was driven by the South, where sales rose 7.3 percent to 454,000 units, and by the West that recorded a rise of 21.2 percent to 223,000 units.