By JOSH BOAK
AP Economics Writer
WASHINGTON (AP) — The construction of new homes climbed by 13.7 percent in October, the biggest jump in a year as builders broke ground on more apartments and single-family houses.
The Commerce Department said Friday that the monthly gain put U.S. housing starts at a seasonally adjusted annual rate of 1.29 million units. That is the best pace for home construction in 12 months.
Housing starts have risen just 2.4 percent year-to-date, largely because fewer apartment complexes are being built. Single-family house construction has driven much of the growth this year in a sign of greater demand from buyers amid a strong job market.
But recent building trends reversed themselves somewhat in October; most of the momentum came from apartment construction. The construction of multi-family properties jumped 37.4 percent in October. The construction of single-family houses increased 5.3 percent.
Still, the construction of new homes has done little to alleviate the increasing shortage of existing homes for sale. This shortage has started to stifle the broader real-estate market. Purchases of existing homes have decreased over the past 12 months, according to the National Association of Realtors. The decline largely reflects the fact that there are 121,600 fewer homes on the market during the same period, a 6.4 percent decrease that new construction has been unable to offset.
Construction in the South rose 17.2 percent last month, a sign the region is regaining its footing after damage from Hurricanes Harvey and Irma. Home construction shot up in the Northeast because of ground breakings for apartments. Construction also increased in the Midwest but declined in the West.
Building permits, an indicator of future construction, rose 5.9 percent in October to 1.3 million.