A new report from the U.S. Census Bureau showed that privately-owned housing starts in August grew at a seasonally adjusted annual rate (SAAR) of 1.180 million units. That was a 0.8 percent decrease from July’s upward-revised print and the second monthly decline in a row but better than economists had anticipated. Most of the weakness was due to a 5.8 percent drop in multi-family (rental) units, while single-family housing starts rose by a healthy 1.6 percent in August. Regionally, housing starts last month fell in the South (-7.9 percent) and the Northeast (-8.7 percent) but lifted in the Midwest (+22.0 percent) and the West (+4.0 percent).
As for total building permits, this popular gauge of future construction activity rose by 5.7 percent in August, the 2nd-largest gain of 2017 and better than expected. Despite the uptick in authorizations, overall homebuilder optimism has eased recently, according to new data from the National Association of Home Builders (NAHB). A scarcity of labor and higher costs for lumber and other materials are partially to blame and NAHB chairman Granger MacDonald said that hurricanes Harvey and Irma have only intensified such concerns. However, NAHB chief economist Robert Dietz stressed that “with ongoing job creation, economic growth and rising consumer confidence, we should see the housing market continue to recover at a gradual, steady pace throughout the rest of the year.”
Sources: Econoday, NAHB, U.S. Census Bureau, FRBSLPost author: Charles Couch