Led by a surge in multifamily production, total housing starts rose 12.3% in August to a seasonally adjusted annual rate of 1.36 million units from an upwardly revised reading in July, according to a report from the U.S. Housing and Urban Development and Commerce Department. This is the highest level since May 2007.
The August reading of 1.36 million starts is the number of housing units builders would begin if they kept this pace for the next 12 months. Within this overall number, single-family starts increased 4.4% to 919,000 units. The multifamily sector, which includes apartment buildings and condos, jumped 32.8% to a 445,000 pace.
“This solid report is in line with our latest survey on builder sentiment,” said Greg Ugalde, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Torrington, Conn. “However, builders continue to wrestle with affordability concerns stemming from excessive regulations and other supply-side challenges.”
“Housing has been on an upswing in recent months as the pace of permits and starts has been rising since spring,” NAHB Chief Economist Robert Dietz. “While these are positive developments, single-family starts are down 2.7% year-to-date as the catch up process continues.”
On a regional and year-to-date basis, combined single-family and multifamily starts in August rose 4.4% in the South. Starts declined 1.8% in Northeast, 5.6% in the Midwest and 11.3% in the West.
Overall permits, which are a harbinger of future housing production, increased 7.7% to a 1.42 million unit annualized rate in August. Single-family permits increased 4.5% to a 866,000 rate while multifamily permits rose 13.3% to a 553,000 pace.
Looking at regional permit data on a year-to-date basis, permits rose 5.7% in the Northeast and 1.6% in the South. Permits fell 6.9% in the Midwest and 5.6% in the West.