• October housing starts were up 4.9% from September and 14.2% from a year ago, according to the Census Bureau, to 1.53 million (SAAR).
• Housing permits in October rose to 1.545 million, unchanged from September and up 2.8% from October 2019.
• Housing completions slipped 4.5% from September, but were up 5.4% from a year ago.

Home builders have their foot on the gas, but given sky-high levels of builder optimism it feels like they’re still leaving a good bit in the tank.

Homebuilder confidence reached a new, all-time high for the third month in a row in November, driven by expectations of enduring buyer traffic into the new year. But this surge in optimism continues to translate to only modest growth in home building activity. Housing starts through October are up 6.7% compared to the same period in 2019, and were revised up for September, a small indication that builders are finding ways to expedite projects and get to work when and where they can. Even so, volatile materials costs and a shortage of available land continue to hold builders back from truly hitting their stride. And flat permitting activity shows that the future project pipeline isn’t exactly overflowing.

As a result, it appears that builders are being more selective with the jobs they take on, with most opting to embark on single family projects. A shortage of existing single-family homes for sale have boosted the need for more newly built ones, and it shows. Single-family home starts have risen 73.6% from April lows and are at their highest level since 2007, while multi-family (5+ units) starts have improved by just 39.2%. One of these is better than none, certainly, but the market needs an awful lot of both.

October marked another step forward for home construction, but only a small one, leaving the market still waiting for the leap it needs.