Total housing starts in the US posted a decline in September due to flat conditions for single-family construction and a pullback for apartment development. Total starts declined 5.3% in September but are 6.4% higher for 2018 on a year-to-date basis, according to the joint data release from the Census Bureau and HUD.
The pace of single-family starts was roughly flat in September, decreasing 0.9% to a seasonally adjusted annual rate of 871,000. Slight gains off the summer soft patch for single-family mirror a minor uptick of the NAHB/Wells Fargo Housing Market Index, now registering a score of 68. While builders are benefitting from recent declines in lumber prices (at least relative to spring and summer’s elevated levels), they continue to report concerns about labor access issues.
Single family starts were up 4.8% year-over-year.
- US homebuilding dropped more than expected in September.
- Construction activity in the South fell by the most in nearly three years, likely held down by Hurricane Florence.
- Housing starts fell 5.3 percent to 1.201 million units last month.
- Data for August was revised down to show starts rising to a rate of 1.268 million units instead of the previously reported pace of 1.282 million units.
- Residential starts dropped 5.3% to 1.201m annualized rate (est. 1.21m) after downwardly revised 1.268m pace in prior month
- Multifamily home starts fell 15.2%; single-family declined 0.9%
- Permits, a proxy for future construction of all types of homes, slipped 0.6% to 1.241m rate (est. 1.275m) after 1.249m pace; reflects decline in multifamily permits
Building permits fell 0.6 percent to a rate of 1.241 million units in September. That was the second straight monthly decline in permits and suggested homebuilding is likely to remain tepid.
Starts in the South, which accounts for the bulk of homebuilding, tumbled 13.7 percent last month. That was the biggest decline since October 2015. Hurricane Florence slammed North and South Carolina in mid-September and flooding from the storm probably depressed homebuilding last month.
A decline in lumber prices from a record earlier this year may also be providing some comfort to developers. A gauge of homebuilders’ confidence rose in October for the first time in five months, according to a National Association of Home Builders/Wells Fargo report released Tuesday, according to Bloomberg.
–Bloomberg
On a year-to-date basis, single-family starts are 6% higher as of September relative to the first nine months of 2017. Single-family permits, a useful indicator of future construction activity, were up slightly (2.9%) in September and have registered a 5.6% gain thus far in 2018 compared to last year.