8/13/2019 U.S. Building Permits Jump to 5-Year High

1/2

See a sample reprint in PDF format.

Dow Jones Reprints: This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients orcustomers, use the Order Reprints tool at the bottom of any article or visit www.djreprints.com

Order a reprint of this article now

U.S. NEWS

U.S. Building Permits Jump to 5-Year HighOctober Data Indicate Brighter Prospects for Construction Sector

Updated Nov. 26, 2013 5:18 p.m. ET

The housing market is showing signs of stabilization as the

year ends, but weaker consumer confidence and another

jump in mortgage rates could spur renewed turbulence inthe sector.

Housing permits surged in October to the highest level in

more than five years, driven largely by solid demand for

multifamily buildings such as apartments and

condominiums, the Commerce Department said Tuesday.

And prices in most major U.S. cities rose in September,

though more slowly than in prior months, according to the

Standard & Poor's/Case-Shiller home-price index.

"The market's clearly getting better," said Jed Kolko, chief economist at Trulia Inc., a real-estate firm. "The

housing recovery has not stopped or gone into reverse."

The housing sector stumbled earlier this year partly due to a spike in mortgage rates after the Federal

Reserve signaled it waslooking to start reining in a bond-buying program that is meant to keep a lid on

long-term rates. Activity started to recover once the Fed stood pat on its bond buying throughout the

summer and into the fall. Still, a 30-year fixed-rate mortgage averaged 4.22% last week, compared with

3.35% in May, according to Freddie Mac.

The latest gauges showed demand firming in some areas. The number of building permits issued inOctober rose 6.2% from a month earlier to a seasonally adjusted annual rate of 1.034 million, the

strongest pace since June 2008.

Permits for multifamily units rose more than 15% in October, while single-family permits rose modestly

and reversed some of their summer decline. The single-family segment is considered a steadier gauge of

the underlying health of the housing market. Stronger permits can signal builder optimism.

Meanwhile, home prices in 20 major U.S. cities rose a seasonally adjusted 1% in September from August

By SARAH PORTLOCK

http://online.wsj.com/public/search?article-doc-type=%7BU.S.+News%7D&HEADER_TEXT=u.s.+newshttp://online.wsj.com/public/resources/documents/Reprint_Samples.pdfhttp://online.wsj.com/news/articles/SB10001424052702304011304579221750701526652#http://clk.atdmt.com/goiframe/283287944/428265465/direct/01http://clk.atdmt.com/goiframe/283287944/428265465/direct/01http://quotes.wsj.com/TRLAhttp://online.wsj.com/public/search?article-doc-type=%7BU.S.+News%7D&HEADER_TEXT=u.s.+newshttp://online.wsj.com/news/articles/SB10001424052702304011304579221750701526652#http://www.djreprints.com/http://clk.atdmt.com/goiframe/283287944/428265465/direct/01http://online.wsj.com/public/resources/documents/Reprint_Samples.pdf

8/13/2019 U.S. Building Permits Jump to 5-Year High

2/2

and 13.3% year-over-year, according to the S&P/Case-Shiller index. Prices for homes with government-

backed mortgages rose a seasonally adjusted 0.3% in September from the prior month and 8.5% from a

year earlier, according to a separate report from the Federal Housing Finance Agency.

The Case-Shiller data showed slower growth from earlier this year, while the FHFA index suggests prices

have slackened since mortgage rates started to rise over the summer.

Turbulence in the housing market has weighed on Fed officials as they consider the next steps for their

$85 billion-per-month bond-buying program. Stabilization in housing could comfort Fed officials ahead oftheir Dec. 17-18 meeting, though a decision to start slowing the bond purchases risks sparking another

run-up in mortgage rates.

Other threats could weigh on the housing market, including relatively modest job growth and weaker

spending. Consumer confidence fell in November to its weakest reading since April, according to a report

released Tuesday by the Conference Board, a business research group. Economists had expected the

index would bounce back after declines in October tied to the federal government shutdown and debt-

ceiling fight.

The 16-day shutdown also delayed the housing data. The Commerce Department didn't release figures

for the more closely watched housing starts because "accurate data" couldn't be collected in time. The

agency will release a full residential construction report for September, October and November on Dec.

18.

Write to Sarah Portlock at sarah.portlock@wsj.com

Copyright 2013 Dow Jones & Company, Inc. All Rights ReservedThis copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreementand by copyright law

For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visitwww.djreprints.com

http://www.djreprints.com/http://online.wsj.com/public/page/subscriber_agreement.htmlmailto:sarah.portlock@wsj.com