Responding to the Commerce Department's September housing starts data -- up 15% from August -- the National Association of Home Builders (NAHB) said tight lending conditions continue to depress the market.
Nationwide housing starts rose 15% to a seasonally adjusted annual rate of 658,000 units in September, the strongest pace of residential construction since April 2010.
"Today's numbers are very welcome evidence that builders are putting some crews back to work on single-family homes in select markets where economic conditions are improving, and on multi-family homes in places where demand for rentals is on the rise," said Bob Nielsen, chairman of the NAHB and a home builder from Reno, Nev. "That said, extremely tight lending conditions for both building and buying new homes, along with stubbornly high foreclosures that are putting downward pressure on home prices, continue to weigh down new construction and corresponding job growth."
The gain was largely attributed to a sharp increase on the multi-family side, which has been trending upward due to increased demand for rental apartments.
"The big gain in multi-family housing production for September was in the wake of a below-trend number in August and in keeping with characteristic volatility in that sector," said NAHB chief economist David Crowe. "However, there's no doubt that demand for apartments is rising, as restrictive mortgage lending policies and concerns about future employment push consumers to pursue rental options."