By Susanne Dwyer
Home-building activity tumbled in September, with housing starts down 4.7 percent to a rate of 1,127,000, according to the latest data from the U.S. Census Bureau and the Department of Housing and Urban Development (HUD). Single-family housing starts decreased 4.6 percent to 829,000. Starts for units in buildings with five units or more came in at 286,000.
Permits also decreased, 4.5 percent from August to 1,215,000, according to the data. Single-family permits were up, however, 2.4 percent to 819,000. Permits for units in buildings with five units or more came in at a 360,000.
Completions totaled 1,109,000 in September, rising 1.1 percent. Single-family completions increased 4.6 percent from August to 781,000. Completions for units in buildings with five units or more came in at 322,000.
“We are seeing the hurricanes take a toll on single-family production, but builder confidence is strong and production should bounce back as the recovery process gets underway,” said Granger MacDonald, chairman of the National Association of Home Builders (NAHB), in a statement.
“Looking at historical data, there is a pattern of decreased production immediately following natural disasters, but economic fundamentals will drive the longer-term trend in housing starts,” said Michael Neal, senior economist at the NAHB. “Nationwide single-family permits are up this month, and year-to-date single-family starts are 9.1 percent ahead of their level over the same period last year—two indicators that this sector continues to improve.”
“At first glance, September’s construction data showed a slip in total housing permits authorized and an increase in total housing units started, but digging deeper shows a more positive picture for potential homebuyers,” says Danielle Hale, chief economist for realtor.com®. The drop in permit data was driven by a decline in multi-family permits, while single-family permits—which more directly affect the inventory of homes for sale—were up from a year ago. Additionally, while single-family starts slipped back from the robust pace we saw in August, compared to a year ago, they are moving in the right direction. Only the South—where post-hurricane rebuilding is dampening construction activity—saw fewer single-family housing starts than a year ago, and all other regions saw double-digit increases. Additionally, all four regions saw an increase in single-family permits.
“New construction will eventually lead to more options for home shoppers, who continued to run up against the lack of homes on the market,” Hale says. “Homes for sale, according to realtor.com data, are down 9 percent from a year ago in September.”
Source: U.S. Census Bureau
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