Monthly Housing Starts Continue Level Pace
The annualized rate of housing starts continued their relatively level pace for the third straight month, according to US Census Bureau data. Privately owned housing starts in September came in at a seasonally adjusted annual rate of 590,000 in September, the Census reported, up 0.5% from August’s rate of 587,000. The rate of homes has hovered at this point since increasing 7% to 590,000 in June, but the September 2009 rate is 28.2% below the September 2008 rate of 822,000. Royal Bank of Scotland analyst Omair Sharif said the three-month run of stable levels suggests the pace of construction activity is leveling off, however, much of this cooling is due to a downtrend in the multi-family sector. “Groundbreaking activity on apartment buildings has fluctuated wildly this year, but the September level stood 59% below the February reading, and both the three-month and six-month averages point to a sharp slowdown in multifamily construction,” Sharif wrote. Single-family housing starts were at a rate of 501,000 in September, a 3.9% increase from August’s rate of 482,000. Starts for buildings with five or more units were at a September rate of 78,000, down from the August rate of 115,000. “The bounce in the single-family sector is encouraging, because we had expected some weakness given the impending expiration of the first-time homebuyers tax credit, which boosted home sales and homebuilding this summer,” Sharif wrote. The seasonally adjusted annualized rate of housing permits issued was 573,000 in September, down 1.2% from August’s rate of 580,000 and 28.9% below the September 2008 rate of 806,000. Single-family building permits were at a rate of 450,000, down 3% from August’s 464,000. The September rate of permits for buildings with five or more units was 104,000, up from 98,000 in August. Housing starts fell in the Northeast (-5.5%), Midwest (-1.8%), and West (-8.8%), but increased in the South (+7.1%) during September. On Monday, research firm Metrostudy projected 2009 housing starts to come in at 562,000 for the year, down 37.9% from 2008. Write to Austin Kilgore.