Single-Family Housing Starts Hold Firm in September

October 17, 2019

Due to a decline in multifamily housing starts, total housing starts fell 9.4 percent in September to a seasonally adjusted annual rate of 1.26 million units, according to a report from the U.S. Housing and Urban Development and Commerce Department.

The September reading of 1.26 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 0.3 percent to 918,000 units. The multifamily sector, which includes apartment buildings and condos, fell 28.2 percent to a 338,000 pace.

“Single-family builders continue to see positive conditions for housing, and this is reflected in NAHB’s Housing Market Index, which measures 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 are still being somewhat cautious as they continue to deal with supply-side challenges which impact housing affordability.”

“Multifamily housing starts fell from an unsustainably high level in August and are running at a solid pace despite the sharp monthly decline,” said NAHB Chief Economist Robert Dietz. “Meanwhile, the rebound for single-family construction continues. Single-family permits have increased since April, and single-family starts have posted gains since May. In another positive development, September marked the first monthly increase for the number of single-family homes currently under construction since January.”

On a regional and year-to-date basis, combined single-family and multifamily starts in September rose 6.0 percent in the South. Starts declined 0.6 percent in the Northeast, 6.2 percent in the Midwest and 12.2 percent in the West.

Overall permits, which are a harbinger of future housing production, fell 2.7 percent to a 1.39 million unit annualized rate in September. Single-family permits increased 0.8 percent to an 882,000 rate while multifamily permits declined 8.2 percent to a 505,000 pace.

Looking at regional permit data on a year-to-date basis, permits rose 8.1 percent in the Northeast and 3.4 percent in the South. Permits fell 4.9 percent in the Midwest and 3.5 percent in the West.