Work began on more homes last month than had been predicted and more residential building permit applications were approved. Both data points represent good news for the construction industry that has been beset by rising supply costs.
But not all the news from the U.S. Census Bureau housing data tracker was good. Crews broke ground on fewer single-family homes than had been expected in July estimates. Home completions also fell from July predictions, though they were higher than August 2020 results.
Single-family housing starts last month were at an annual rate of 1.08 million, down nearly 3 percent from the July revised figure of 1.1 million, census data showed. It was the second straight month that single-family housing starts fell below expectations, CNBC reported, citing census data.
Meanwhile, multifamily starts — five or more units — jumped to 530,000, up nearly 22 percent from July estimates.
Overall, housing starts were at an annual rate of 1.62 million — seasonally adjusted — up about 4 percent from July estimates. That was also 17 percent higher than August 2020 numbers.
Development continued despite material and labor shortages that have hindered builders and driven up prices amid the nation’s housing shortage. Those shortages have eased, though it hasn’t had an impact on the market yet, experts said.
“While lumber prices have plummeted in the spot market, those lower prices have not yet made their way to home builders,” Wells Fargo’s Mark Vitner told CNBC. Wood was only part of the problem. Windows, cabinets and edge anchors are still in supply.
And other issues that have held up projects. Homebuilding giant Lennar cited supply chain delays as the reason it delivered fewer homes that it had predicted — 15,199, about 600 below estimates — at its third-quarter earnings call Tuesday. The company also lowered its guidance for the fourth quarter.
August single-family housing starts are a sharp dropoff from March, when the rate surged to 1.25 million units — the highest level since November 2006, according to CNBC.
Still, a September housing market index that gauges builder perceptions of current and future single-family home sales showed that confidence was up slightly.
For the August census data, building permit authorizations — approved for construction but where work hasn’t started — showed a seasonally adjusted annual rate of 1.7 million. That was up 6 percent from July’s estimates and nearly 14 percent higher than August 2020. Single-family permit approvals were at a rate of just over 1 million, about 0.6 higher than July’s estimate.
Meanwhile, multifamily permit approvals surged, to 632,000 last month. That was nearly 20 percent higher than July estimates and 53 percent over August 2020 numbers.
Home construction completions were mixed in August. They stood at a seasonally adjusted annual rate of 1.3 million, about 4.5 percent below July’s revised estimate. But that was also 9.4 percent above last year’s rate, according to the data.