Single-family housing construction picks up pace in August

Overall, housing starts amounted to 891,000 at an annual pace last month — up 0.9 percent from the 883,000 in July. 

An 11.1 percent drop to 263,000 multi-family units weighed on the positive single-family figures. 

“This is the kind of signal we’ve been looking for, with single-family starts and permits up or holding steady across every region in the nation,” said David Crowe, chief economist for the National Association of Home Builders.

{mosads}”Today’s report is reflective of gradual improvement in buyer confidence in the overall market and our recent surveys that indicate a solid outlook for single-family production.”

Housing starts are 19 percent higher than a year ago. 

Crowe said the drop on the multifamily side reflects a “catching up” with underlying rental demand.

“We expect to see additional multifamily starts in the future, but not as rapid a pace of growth as we’ve seen in the past,” he said.

Total permits declined 3.8 percent to a rate of 918,000 from 954,000 in July because of a 15.7 percent decline in apartment permits.

While the housing market continues its recovery, builders have expressed concern about rising mortgage rates, which have ticked up by more than a percentage point over the summer. 

“Overall, this is an encouraging report as builders are seeing pent-up demand begin to be released for single-family homes despite headwinds such as rising mortgage rates and tight credit conditions,” said Rick Judson, chairman of the NAHB and a homebuilder from Charlotte, N.C.

But the Federal Reserves’s decision on Wednesday to maintain its $85 billion in monthly bond purchases could ease some of those interest rate concerns. 

Despite lingering concerns, homebuilders said on Tuesday that their confidence in the market had hit its highest level in eight years in September. 

Regionally, single-family starts rose 9.6 percent in the Northeast, 7.1 percent in the Midwest, 2.3 percent in the South and 17.5 percent in the West.

Permits increased 2.9 percent in the Midwest, 2.5 percent in the South, 5.3 percent in the West and held steady in the Northeast.