While housing starts for August again failed to rise above the 900,000 pace, the National Association of Home Builders celebrated the gain in single-family starts.
Led by a solid increase in single-family starts, nationwide housing production rose 0.9% to a seasonally adjusted annual rate of 891,000 units in August, according to figures released Wednesday by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. Meanwhile, construction of multi-family buildings slowed following a rebound in the previous month.
“Overall, this is an encouraging report as builders are seeing pent-up demand begin to be released for single-family homes despite headwinds, such as rising mortgage rates and tight credit conditions,” said Rick Judson, NAHB chairman and a home builder from Charlotte, N.C.
“This is the kind of signal we’ve been looking for, with single-family starts and permits up or holding steady across every region in the nation,” said NAHB chief economist David Crowe.
“Today’s report is reflective of gradual improvement in buyer confidence in the overall market and our recent surveys that indicate a solid outlook for single-family production. On the multi-family side, we are catching up with underlying rental demand. We expect to see additional multi-family starts in the future, but not as rapid a pace of growth as we’ve seen in the past.”
Single-family housing starts rose 7% to a 628,000-unit pace. Regionally, single-family starts activity rose 9.6% in the Northeast, 7.1% in the Midwest, 2.3% in the South and 17.5% in the West.
The annualized rate of multifamily production fell 11.1% to a seasonally adjusted annual rate of 263,000 units.
Overall building permits, which are an indicator of future building activity, declined 3.8% to 918,000 units in August. This was due entirely to a pullback in the multi-family sector, where permits fell 15.7% to 291,000 units. Single-family permits posted a 3% gain to 627,000 units -- the best pace since May 2008.
Regionally, single-family permit issuance increased 2.9% in the Midwest, 2.5% in the South, 5.3% in the West and held steady in the Northeast.