Construction companies in the US built more apartment complexes in September, resulting in a temporary rise in housing starts for a real estate market that otherwise appeared to have crested during the summer.
Housing starts last month rose 6.5 per cent to a seasonally adjusted annual rate of 1.21 million homes, the Commerce Department said on Tuesday. But a 17 percent surge in multifamily housing — which includes apartments — accounts for almost all of that.
New construction and sales of existing homes surged in the first half of the year as more Americans found work and the unemployment rate dipped to a solid 5.1 percent. But tight inventories, rising prices and the absence of meaningful wage growth have capped growth as affordability has become an issue.
Housing starts have soared 12 per cent in the first nine months of 2015. But the pace of building retreated from its June apex, in part because of the expiration of tax incentives for developers in New York.
Approved permits fell 5 per cent in September to an annual rate of 1.1 million, a sign that construction will slow in the coming months.
Housing Starts, US
Approved permits fell 5 per cent in September to an annual rate of 1.1 million.
Sales of existing homes similarly accelerated through the start of the summer, only to decline in August. Just 5.2 months’ supply of existing homes homes have propped up prices. The median cost to buy a home in- creased 4.7 percent over the year, to US$228,700, according to the National Association of Realtors.