Housing starts up 6.3% but gains all concentrated in multifamily

More signs of slowing market in permits, starts after August plunge

Housing starts in September rose just 6.3% in September after plunging 14.4% in August, not enough to make up lost ground, and with almost all of the gains concentrated among multifamily buildings rather than single-family homes. 

Single-family housing starts in September were at a rate of 646,000; this is just 1.1% above the revised August figure of 639,000. The September rate for units in buildings with five units or more was 353,000, which is 18.5% above August 2014.

“After last month's weakness, starts and permits appear to have bounced back within the recent range. Increasingly volatile, we appear to be little changed from levels at the start of the year suggesting stabilization at best in housing, at least from a supply standpoint,” said Sterne Agee chief economist Lindsey Piegza. “Uneven demand is likely to keep home builders cautious for some time, despite the fact that industry confidence is on the rise thanks to relative improvement in conditions compared to weakness at the start of the year.”

This means single-family starts slowed to the slowest pace since May.

“The rise in housing starts in September continued the recent volatile pattern whereby a decline in one month has been followed by an increase in the next. But while there has been little underlying growth in housing starts so far this year, the outlook is encouraging,” said Paul Diggle, property economist for Capital Economics.

Construction starts were up 17.8% from the year-earlier period.

Signaling continued market slowdown, privately-owned housing units authorized by building permits in September were at a seasonally adjusted annual rate of 1,018,000. This is 1.5% above the revised August rate of 1,003,000 and is 2.5% above the September 2013 estimate of 993,000.

Single-family authorizations in September were at a rate of 624,000; this is 0.5% below the revised August figure of 627,000. Authorizations of units in buildings with five units or more were at a rate of 369,000 in September.

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