Housing Starts Decline 9 Percent in September on Multifamily WeaknessOctober 20th, 2016 by Editor
A sharp decline in multifamily production brought overall nationwide housing starts down 9 percent 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, according to the report.
“Single-family starts posted their highest level since February and are consistent with builder sentiment, which has remained firm in recent months,” says 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,” says 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 percent in September to a seasonally adjusted annual rate of 783,000 units while multifamily production declined 38 percent 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 percent, 14.1 percent and 5.3 percent, respectively. Starts remained unchanged in the West.
Overall permit issuance, which is a harbinger of future building activity, rose 6.3 percent to a seasonally adjusted annual rate of 1.23 million.
Single-family permits edged up 0.4 percent in September to a rate of 739,000 while multifamily permits rose 16.8 percent to 486,000.
Permit issuance increased 23.6 percent in the Northeast, 15.8 percent in the West and 2.6 percent in the South. Meanwhile, the Midwest posted a loss of 5.2 percent.