US housing starts, the number of privately owned homes that have begun construction, reached a seasonally adjusted annual rate of 598,000 in August, a 1.5% jump from July. Starts remain down 29.6% from August 2008, according to a study by the US Department of Housing and Urban Development (HUD). Privately owned housing completions in August dropped 5.5% from July to 760,000, marking a 25.3% decrease from August 2008 when the completion rate reached more than 1m. Despite the slowdown in completions, housing starts are approaching a bottom if they have not reached one already, according to Brad Hunter, the chief economist at Metrostudy. Metrostudy does a complete count of starts, inventory, move-ins and lot supplies in 84 US metropolitan statistical areas. “Many builders have not only reduced excess inventory but now are actually reporting such low inventory that they need to start more homes to replace those they’ve just sold,” Hunter said. Hunter also noted the impending expiration of tax incentives for home purchases leading to a slow recovery from that bottom if those incentives are not extended. Write to Jon Prior.
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