New starts for privately owned residential construction for October were at a seasonally adjusted annual rate (SAAR) of 1.314 million, which was +3.8% higher than September, and +8.5% above October 2018. Single family home starts were up +2.0% to a SAAR of 936,000, and buildings with 5 or more units were up +6.8% to a SAAR of 362,000. A +27.3% jump in completions for 5 or more unit residences and a +4.5% increase in single family home completions helped pull overall completions up to a 1.256 million SAAR, up +10.3% for the month, and +12.4% for the year, and will provide much needed inventory for a tight housing market.

After a downwardly revised -2.5% drop in September, the National Association of Realtors (NAR) reported that existing home sales were up +1.9% in October to a 5.460 million SAAR, and up +4.6% from October 2018. Yearly gains in home prices continued for the 92nd month in a row and the median sale price was up +6.2% over the year to $270,900. However, inventory was down -2.7% from September and -4.3% over the year, with available units down to a 3.9 month supply from September’s 4.1 month supply. An NAR spokesman noted that low mortgage rates and increases in wages and employment would be likely to help sales climb, but also remarked that additional inventory would be needed to help slow increasing home prices.

The Federal Reserve released the minutes of the October 29-30 meeting in which they voted to lower the federal funds rate for the third straight meeting. The minutes noted that most participants judged the stance of policy after this rate cut would be able to support the committee’s goals for growth, employment and inflation, and that the rate would remain where it was “so long as incoming information about the economy did not result in a material reassessment of the economic outlook”. The staff review of the economic outlook indicated a strong labor market, moderate GDP growth and lower inflation, although longer run inflation was still expected to reach the 2% target rate. However, the review also found the pace of job gains slowing, drops in nonresidential fixed investment, declining industrial production, and an overall softening in manufacturing.