Steel Markets

Housing Starts Rocket in October led by Multifamily Structures
Written by Sandy Williams
November 17, 2016
Housing starts jumped 25.5 percent in October from September to a seasonally adjusted annual rate of 1,323,000. Starts of multifamily structures of 5 units or more leapt 74.5 percent from the previous month for a rate of 445,000 and were up 28.2 percent year over year. Single family housing starts grew 10.7 percent from September and were up 21.7 percent year over year to a rate of 869,000 units.
Housing starts were especially strong in the Northeast and Midwest with each posting month over month gains of over 44 percent. The West followed with a gain of 23.2 percent and the South gaining 17.9 percent.
“These robust figures correlate with strong builder optimism in the housing market,” said Ed Brady, chairman of the National Association of Home Builders (NAHB). “A firming job market, a growing economy and rising household formations will keep the housing recovery on track into next year.”
“Multifamily production bounced back after an unusually weak reading last month while single-family starts exhibited unusually strong growth as well,” said NAHB Chief Economist Robert Dietz. “Though October’s single- and multifamily production rates are clearly unsustainable, we expect continued growth in the housing sector in the months ahead.”
Permit authorizations, an indicator of future building, were at a seasonally adjusted annual rate of 1,229,000, 0.3 percent above the revised September rate of 1,225,000 and 4.6 percent above the October 2015 estimate of 1,175,000. Single family authorizations, which accounted for approximately 60 percent of permits issued in October, led the increase at a rate of 762,000, with a monthly gain of 2.7 percent and a yearly gain of 5.1 percent. Multifamily authorizations of 5 units or more fell 1.8 percent from September.
The Midwest led in permit authorizations at a monthly increase of 12.1 percent followed by the West with an increase of 7.4 percent. Permit authorizations softened in the Northwest and South.
“Ongoing job creation, rising incomes and attractive mortgage rates are supporting demand in the single-family housing sector. This will help keep housing on a steady, upward glide path in the months ahead,” said NAHB Chief Economist Robert Dietz.

Sandy Williams
Read more from Sandy WilliamsLatest in Steel Markets

Week in Review: Sept. 29 -Oct. 3
Let’s take a quick tour of some key stories from SMU in the week of Sept. 29 - Oct. 3.

Hot-rolled coil sources lament stagnant conditions
Participants in the hot-rolled sheet market expressed frustration with the continuing lack of demand this week.

Plate market sources critique mill hikes amid current market conditions
Following spot market plate price increase notices issued by domestic mills this past week, participants are contemplating the rationale behind the increases and whether they will stick. Some sources anticipate that current market conditions will shift in November and believe the increases may set a new "pricing floor."

ITC’s final ruling: Dumped, subsidized CORE imports are harming domestic market
The US International Trade Commission (ITC) finds that corrosion resistant steel (CORE) imports from 10 countries have caused material damage to domestic product producers, according to the ITC’s statement.

HR buyers report mixed market conditions
Hot-rolled coil market participants said they’re staying on their toes amid a market that continues to be characterized by uncertainty. A veteran Midwest-based service center operator contends that current conditions are unprecedentedly volatile. Being flexible with customers and strategic with mills is the only way to navigate through the uncertainty, he said. “No one wants […]