Housing starts receded 3 percent to a seasonally adjusted annual rate of 1.126 million units in August, the Commerce Department reported this week. The decline in housing starts follows on the heels of a survey that shows homebuilders are more upbeat about the new-home sector, as confidence reached its highest reading since October 2005.
Read more: Builders Are More Upbeat Over Prospects
The Commerce Department’s report this week showed that single-family housing starts dropped 3 percent in August to a seasonally adjusted annual rate of 739,000 while multifamily starts fell 3 percent to 387,000 units.
Still, the builder’s tradegroup was shaking off concerns about the latest drop in starts.
“A slight one-month decline is not unusual as the housing market moves forward at a slow and steady pace,” says David Crowe, chief economist at the National Association of Home Builders. “However, encouraging permit data, year-over-year increases in single and multifamily production, and rising builder confidence all bode well for a continuing, gradual recovery throughout the rest of the year.”
Overall permit issuance ticked up 3.5 percent in August to a rate of 1.170 million, setting the way for an increase in construction on the horizon. Broken out, multifamily permits increased 4.7 percent month-to-month, reaching a rate of 471,000, while single-family permits rose 2.8 percent to 699,000.
Sluggish Sector?
“Permit growth indicates that our members feel confident that consumers are returning to the market,” says NAHB Chairman Tom Woods. “However, builders are reporting concerns with lots and labor availability, which could have contributed to this month’s production dip.”
By region, single and multifamily housing starts dropped by the largest amount in August in the Northeast, which posted a 33.7 percent month-to-month decline. The Midwest posted a 9.8 percent drop in housing starts while the Midwest had a 1.1 percent decrease. The South was the only region in the U.S. to record a gain last month, at 7.1 percent.
Permits – a measure of future homebuilding – ticked up by the largest amounts in the West, increasing 9.6 percent month-over-month. The Midwest posted gains of 2.9 percent in permits in August and the South posted a 2.4 percent gain. In the Northeast, permits dropped 4.4 percent month-over-month.
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