Following two months of gains, housing starts slowed last month. Housing production nationwide dropped 5.8 percent to a seasonally adjusted annual rate of 1.14 million in August, the Commerce Department reported this week. Broken out, single-family housing starts dropped 6 percent while multifamily production fell 5.4 percent in August.
The builders’ trade group, however, says it is a temporary blip. The South saw the sharpest decline in activity last month, which housing experts attribute to last month’s heavy rain and flooding in the area that may have delayed construction.
“With builders reporting low inventory levels and rising confidence, we expect more consumers will return to the market in the months ahead,” says Ed Brady, chairman of the National Association of Home Builders.
On a year-over-year basis, single-family starts are up 9 percent; multifamily construction continues to level off at a “solid level as that sector seeks to find a balance between supply and demand,” adds NAHB Chief Economist Robert Dietz.
Overall single-family housing permits, a gauge of future construction, increased 3.7 percent in August to a rate of 737,000. It’s the largest gain from single-family permits since 2014. On the other hand, multifamily permits dropped 7.2 percent to 402,000, the Commerce Department reports.
Permits are up by the highest amounts in the Northeast, which posted a 5.1 percent increase in August, followed by a 4.2 percent increase in the Midwest and a 0.7 percent uptick in the West. The South posted a 3.4 percent decrease in permits.