Multifamily Drives Housing Starts Down in September
WASHINGTON — A sharp decline in multifamily production brought overall nationwide housing starts down 9% in September, according to newly released data from the U.S. Housing and Urban Development and the Commerce Department. However, both single-family production and overall permit issuance posted solid gains.
“Single-family starts posted their highest level since February and are consistent with builder sentiment, which has remained firm in recent months,” said Ed Brady, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Bloomington, Ill. “Low mortgage rates, along with solid permit and job growth should keep demand for single-family housing moving forward in the months ahead.”
“After strong readings during the summer, multifamily production pulled back in September,” said NAHB Chief Economist Robert Dietz. “Still, we expect the multifamily sector to post a good year in 2016, though down a bit from last year, which was likely the peak year for this cycle.”
Single-family starts rose 8.1% in September to a seasonally adjusted annual rate of 783,000 units while multifamily production declined 38% to 264,000 units.
Combined single- and multifamily starts fell in three of the four regions in August. The Northeast, Midwest and South posted losses of 36%, 14.1% and 5.3%, respectively. Starts remained unchanged in the West.
Overall permit issuance, which is a harbinger of future building activity, rose 6.3% to a seasonally adjusted annual rate of 1.23 million.
Single-family permits edged up 0.4% in September to a rate of 739,000 while multifamily permits rose 16.8% to 486,000.
Permit issuance increased 23.6% in the Northeast, 15.8% in the West and 2.6% in the South. Meanwhile, the Midwest posted a loss of 5.2%.