The production and permitting of new U.S. homes — single- and multi-family — spiked in September, reaching their highest levels since July 2008, according to Census Bureau and U.S. Department of Housing and Urban Development data released today. June saw a similar jump.
Total housing starts in September came in at a seasonally adjusted annual rate of 872,000, which marks a 15 percent month-over-month increase and a 34.8 percent year-over-year jump. Separated by type, single-family housing starts came in at a rate of 603,000, up 11 percent month-over-month and 42.9 percent year-over-year. Structures with five units or more posted a 25 percent month-over-month increase to 260,000 units, which is also an 18.7 percent year-over-year gain.
“Yet, while September’s surge in activity is certainly encouraging, we need to remember that we still have a long way to go back to a fully functioning market,” said National Association of Home Builders Chairman Barry Rutenberg in a separate release, “and in order to get there, significant challenges must still be addressed in terms of credit availability and appraisal issues, as well as the increasing cost of building homes due to rising materials prices and a declining inventory of buildable lots.”
NAHB’s Chief Economist David Crowe said today’s numbers confirm that a housing recovery is underway in a greater number of U.S. markets.
“That said, we are now almost at the half-way mark in terms of what would be considered a normal amount of new-home construction in a healthy economy,” he said, “and we need to see consistent improvement like this over an extended period to get back to where the market should be in terms of generating jobs and economic growth.”
Combined housing starts rose month-over-month in all regions of the country minus one: While the Northeast fell 5.1 percent, the Midwest, South and West gained a respective 6.7 percent, 19.9 percent and 20.1 percent.
Meanwhile, the issuance of building permits — an indicator of future building activity — increased last month in both the single- and multi-family sectors. Single-family permits posted a 6.7 percent month-over-month climb with a rate of 545,000 — multi-family came in with a seasonally adjusted rate of 323,000, marking a 22.8 percent month-over-month gain. — Zachary Kussin