Single-Family Housing Starts Hold Steady
October 17, 2019
Single-family housing starts in September were at a rate of 918,000, up 0.3 percent from the revised August figure of 915,000, according to data from the U.S. Census Bureau and the Department of Housing and Urban Development.
Privately-owned housing starts in September were at a seasonally adjusted annual rate of 1,256,000, which 9.4 percent below the revised August estimate of 1,386,000 but is 1.6 percent above the September 2018 rate of 1,236,000.
Single-family authorizations in September were at a rate of 882,000, which is 0.8 percent above the revised August figure of 875,000. Privately-owned housing units authorized by building permits in September were at a seasonally adjusted annual rate of 1,387,000, which is 2.7 percent below the revised August rate of 1,425,000 but is 7.7 percent above the September 2018 rate of 1,288,000.
Single-family housing completions in September were at a rate of 852,000, down 8.6 percent from the revised August rate of 932,000. Privately-owned housing completions in September were at a seasonally adjusted annual rate of 1,139,000, down 9.7 percent from the revised August estimate of 1,262,000 and is one percent below the September 2018 rate of 1,150,000.
“Housing starts fell 9 percent in September, led by a 28 percent drop in multifamily starts,” observed Joel Kan, MBA associate vice president of economic and industry forecasting. “The decline in multifamily starts was a reversal from a 41 percent increase in August. The three-month average was down around three percent. More importantly to home purchase market, single-family starts remained robust, increasing slightly to a pace of 918,000 units–the highest since May 2019. However, the increase in single-family starts was solely concentrated in the South. Most of the country still needs more new construction to meet job growth and demand. It is promising that single-family permits continued to rise, increasing for the fifth consecutive month.”
Lawrence Yun, chief economist at the National Association of Realtors (NAR), said: “The housing industry is plagued by a shortage of inventory. Apartment vacancy rates are low and the number of homes listed for sale are just not enough. Naturally, developers should be boosting home construction to relieve the tight supply. To a degree, it is moving in the right direction: single-family housing starts rose a notch in September and are higher by 4 percent from a year ago. But multifamily housing starts, which have been predominately apartments and not condominiums, sharply declined by 28 percent in September and are down 6 percent from a year ago. With new condo-rules on FHA mortgages, developers should anticipate rising demand for multifamily units.”
Greg Ugalde, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Torrington, Conn., noted: “Single-family builders continue to see positive conditions for housing, and this is reflected in NAHB’s Housing Market Index, which measures builder sentiment. However, builders are still being somewhat cautious as they continue to deal with supply-side challenges which impact housing affordability.”
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