Building Permits Rise to Five-Year High

Applications for home construction, an indicator of future construction activity, rose to the highest level in five years in October, the Commerce Department said Nov. 26.

Building permits rose 6.2% last month to a 1 million annual pace, the most since June 2008, Commerce said.

Economists had forecast an annual rate of 930,000, Bloomberg News reported.

Housing starts data that usually are reported with building permits were delayed until Dec. 18 due to the partial federal government shutdown last month.

“Even if the income gains and job gains are relatively subdued, people do need somewhere to live,” David Sloan, senior economist at 4Cast Inc. told Bloomberg. “The proportion of incomes going to housing will gradually improve,” he said.

Two of the four regions had an increase in permits, led by a 15.4% rise in the West, permits  declined 9.6% in the Midwest. Year-over-year, building permits increased 13.9% in October.