US housing starts and building permits beat forecasts

US housing starts and building permits both came in better than market expectations for October, according to figures from the Census Bureau and Department of Housing and Urban Development.

Privately owned housing starts rose by 1.9% to 1.372m, slowing from the 3.1% growth in September but came ahead of the 1.350m consensus estimate.

Meanwhile, permits for new construction projects on private housing – the more forward-looking measure of activity – increased by 1.1% to 1.487m. This came after a revised 4.5% slump in September to 1.471m, surprising analysts who had expected a drop to 1.450m.

Nancy Vanden Houten, lead US economist at Oxford Economics, said the increase in permits suggests a "resilient" housing sector amid higher interest rates and tighter credit conditions.

"Our forecast is for housing starts to weaken over the balance of the year and into the first quarter of 2024 before beginning to recover around mid-year. However, the permits data and the latest decline in mortgage rates lend upside risk to that outlook."