As Summer Ends, Homebuilding Picks Up
September 20, 2018
Builders worked to add more single-family homes to many inventory-starved markets last month. Housing starts nationwide climbed 9.2 percent in August, reaching a seasonally adjusted annual rate of 1.28 million units, the Commerce Department reported Wednesday.
Broken out, single-family starts rose 1.9 percent to 876,000 units, while the multifamily sector—which includes apartment buildings and condos—accounted for the biggest part of the uptick and rose 29.3 percent last month to a total of 408,000.
“Although we saw an increase in starts in August, we are likely to see softening in the market in the months ahead,” says Robert Dietz, chief economist of the National Association of Home Builders. “Affordability is a particular concern because of home price gains, due in part to the high regulatory burden on new-home construction. Increasing costs for building materials prompted partially by recent imposed tariffs on a wide range of products are also a concern. Moreover, interest rates are continuing their gradual upward climb.”
Housing permits—a gauge of future housing production—fell 5.7 percent to 1.23 million in August. Single-family permits plunged 6.1 percent to 820,000 units, while multifamily permits decreased 4.9 percent to 409,000.
Regionally, the West saw the biggest increase in homebuilding last month, up 19.1 percent month-over-month in combined single-family and multifamily housing starts. Housing starts also rose 9.1 percent month-over-month in the Midwest and by 6.5 percent in the South. The Northeast remained unchanged.
Updated: March 21, 2019