Decline in Multifamily Forces August Housing Starts to Drop Nearly 15 Percent

Led by a steep 31.7 percent decline in multifamily production, nationwide housing starts fell 14.4 percent to a seasonally adjusted annual rate of 956,000 units in August, according to newly released figures from the U.S. Department of Housing & Urban Development (HUD) and the U.S. Census Bureau. Single-family housing starts dropped 2.4 percent to a seasonally adjusted annual rate of 643,000 units. "The August drop in multifamily starts is not too surprising, given how volatile the numbers have been the last 18 months," said David Crowe, chief economist of the National Association of Home Builders (NAHB). "And while single-family starts registered a slight decline, low mortgage rates, affordable home prices and pent-up demand will keep single-family production moving forward in 2014." Combined housing starts fell in all regions of the country. The Northeast, Midwest, South and West posted respective drops of 12.9 percent, 10.3 percent, 10.9 percent and 24.7 percent. Issuance of building permits registered a 5.6 percent loss to a seasonally adjusted annual rate of 998,000 units in August. Multifamily permits fell 12.7 percent to 372,000 units while single-family permits decreased 0.8 percent to 626,000 units. "Our members are telling us that traffic to new model home sites and sales expectations are on the rise," said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Del. "Despite the monthly blip, single-family starts are still 8 percent above last year's level." Regionally, the Northeast, Midwest, South and West registered overall permit losses of 11.6 percent, 12.4 percent, 0.6 percent and 8.3 percent, respectively.