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The number of new housing units started in October continued to decline, a reflection of the continued downward spiral in homebuilder sentiment<\/a>, dropping 4.2% from September<\/a> to a seasonally adjusted annual rate of 1.425 million, according to a report<\/a> released Thursday by\u00a0U.S. Census Bureau<\/strong>\u00a0and the\u00a0U.S. Department of Housing and Urban Development<\/strong>.<\/p>\n October\u2019s annual housing start rate was down 8.8% on a year over year basis, according to the report. These declines come after a sharp monthly drop of 8.1% in September.<\/p>\n \u201cOctober was a challenging month with disappointing inflation data \u2014 though more recent readings have been more positive \u2014 and soaring interest rates. It is no surprise that home building activity reverted back to a downward trend, though the drop was not as severe as it was expected to be,\u201d Nicole Bachaud, Zillow\u2019s economist, said in a statement.<\/p>\n Decreases in both single family and multifamily homebuilding contributed to the slower pace of building, with the single-family sector posting a 6.1% monthly decline and the multifamily sector<\/a> falling 0.5% from the month prior. <\/p>\n However, the number of multifamily housing starts is up 17.3% year over year, at an annual pace of 556,000, while the number of single family housing starts is at a pace of 855,000, down 20.8% from a year ago.<\/p>\n Regionally, housing starts were down month over month in the Northeast (-34.7%), Midwest (-11.1%) and West (-10.6%), but they were up 6.7% in the South. On a yearly basis, housing starts were down in the Midwest (-13.6%), South (-1.1%), West (-19.6%), and the Northeast (-15.8%).<\/p>\n \u201cPrices for construction materials<\/a> and labor remain significantly elevated, though material costs have shown some signs of easing. Prices for steel, plywood, copper, gypsum and concrete all remain significantly higher than pre-pandemic, but recorded month-over-month declines in October,\u201d Odeta Kushi, First American\u2019s <\/strong>deputy chief economist, said in a statement.<\/p>\n \u201cOn the labor side, according to the October jobs report, average hourly earnings in construction were up 6.6% on a year-over-year basis, significantly above the pre-pandemic average pace of approximately 2.8 percent,\u201d Kushi said.<\/p>\n