Housing starts continued to decline in October, falling to a seasonally adjusted annual rate of 1.31 million, down 3.1% from September’s already sluggish level of 1.35 million, according to the latest housing report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

The report found that single-family home starts for the month were down to a seasonally adjusted annual rate of 970,000, which is 6.9% below the revised September estimate of 1.04 million and 4.0% below the rate from one year ago. Starts for rental units in buildings with five units or more reached an annual rate of 326,000.

Building permits for October were at an annual rate of about 1.42 million, which fell 0.6% from September, and were down a hefty 7.7% from October 2023. Single-family permits authorized in October were up 0.5% to an annual rate of 968,000, slightly more than September’s rate of 963,000. Authorization to construct apartments in buildings with five units or more reached an annual rate of 393,000 in October.

The limited good news in the report was that the number of completed homes in October was at a seasonally adjusted annual rate of 1.6 million, 4.4% below the revised September estimates of 1.69 million, but up a whopping 16.8% year over year. Single-family homes were completed at an annual rate of 968,000 during the month, 1.4% below the revised September rate of 1 million. The October annual rate of completion for multifamily units in buildings with five units reached 615,000.

Despite the housing woes, Carl Harris, chairman of the National Association of Home Builders (NAHB), focused on the fact that builders expect better times ahead.

“Although housing starts declined in October, builder sentiment improved for a third straight month in November as builders anticipate an improved regulatory environment in 2025 that will allow the industry to increase housing supply,” said Harris.

NAHB’s chief economist Robert Dietz pointed out that while the combination of condominium and apartment starts were higher in October, the total number of multifamily units under construction was at the lowest level since March 2022.

“Further interest rate cuts from the Federal Reserve through 2025 should result in lower interest rates for construction and development loans, helping to lead to a stabilization for apartment construction and expansion for single-family home building,” Dietz said.