Housing starts rose 6.3% in September to an annualized pace of 1.02 million.
Expectations were for starts to rebound some, growing 5.4% month over month to an annualized rate of just over 1 million after last month's disappointing report.
Building permits rose 1.5% to an annualized rate of 1.02 million from last month's revised level of 1.003 million.
Building permits were expected to jump 2.7% month-over-month after last month's 5.6% decline.
Last month's report from Census showed that starts plunged 14.4% to an annualized rate of 956,000, well below the expected decline of 5.2% to an annualized pace of 1.04 million.
Last month's housing starts rate was revised up slightly to 957,000.
In a note to clients following the report, Ian Shepherdson at Pantheon Macro said, "In one line: Details less impressive than the headline."
Shepherdson added: "Almost all the increase in starts is in the hyper-volatile multi-family sector — up 16.7% in Sep after a 28.7% plunge in August — while single-family starts rose a trivial 7K. Given the fragility of the markets, though, what matters right now is the headline print. All the rise in permits was in multi-family, with single-family down slightly. The underlying trends in both single- and multi-family permits, which lead starts, are flat, and while the drop in mortgage rates likely will prompt stronger home sales by the turn of the year, we don't expect a significant upward trend in construction to re-emerge until next spring."
Here's the full release from Census:
The U.S. Census Bureau and the Department of Housing and Urban Development jointly announced the following new residential construction statistics for September 2014:
BUILDING PERMITS
Privately-owned housing units authorized by building permits in September were at a seasonally adjusted annual rate of 1,018,000. This is 1.5 percent (±1.1%) above the revised August rate of 1,003,000 and is 2.5 percent (±1.2%) above the September 2013 estimate of 993,000.
Single-family authorizations in September were at a rate of 624,000; this is 0.5 percent (±1.1%)* below the revised August figure of 627,000. Authorizations of units in buildings with five units or more were at a rate of 369,000 in September.
HOUSING STARTS
Privately-owned housing starts in September were at a seasonally adjusted annual rate of 1,017,000. This is 6.3 percent (±9.3%)* above the revised August estimate of 957,000 and is 17.8 percent (±14.4%) above the September 2013 rate of 863,000.
Single-family housing starts in September were at a rate of 646,000; this is 1.1 percent (±8.3%)* above the revised August figure of 639,000. The September rate for units in buildings with five units or more was 353,000.
HOUSING COMPLETIONS
Privately-owned housing completions in September were at a seasonally adjusted annual rate of 999,000. This is 8.6 percent (±17.2%)* above the revised August estimate of 920,000 and is 31.3 percent (±23.7%) above the September 2013 rate of 761,000.
Single-family housing completions in September were at a rate of 624,000; this is 1.0 percent (±11.6%)* above the revised August rate of 618,000. The September rate for units in buildings with five units or more was 368,000.
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