August housing starts rose but single-family properties fell short

Multifamily construction was a bright spot, while work began on fewer houses than predicted

National /
Sep.September 22, 2021 12:15 PM
Builders broke ground on more homes in August than had been predicted, as multifamily development surged. Single-family home construction, however, fell below expectations. (iStock)

Builders broke ground on more residential properties in August than had been predicted, but the number of single-family housing starts fell below expectations. (iStock)

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.





    Related Articles

    arrow_forward_ios
    Arthur Zeckendorf and Gary Barnett with 1289 Lexington and Central Park Tower (Terra holdings, Getty, RODE, Central Park Tower)
    The bargain hunters: Buyers target cheaper new development units
    The bargain hunters: Buyers target cheaper new development units
    Gary Barnett with Central Park Tower (Getty)
    Central Park Tower condo sells for $20M off asking
    Central Park Tower condo sells for $20M off asking
    Doma CEO Max Simkoff (Getty Images, YouTube/Berkeley Haas, Doma)
    Title insurer Doma cuts 40% of workforce in third wave of layoffs
    Title insurer Doma cuts 40% of workforce in third wave of layoffs
    (Photo illustration by The Real Deal with Getty)
    Mortgage applications decline even as rates fall again
    Mortgage applications decline even as rates fall again
    (Illustration by The Real Deal with Getty)
    TRD Pro: Is homebuilding really down?
    TRD Pro: Is homebuilding really down?
    TRD's Harrison Connery, Orion Jones and Hiten Samtani
    Watch: Understanding Compass’ latest financials
    Watch: Understanding Compass’ latest financials
    2801 Riverton Road in Cinnaminson, NJ (Redfin, Getty)
    Mansion listed for $25M sets South Jersey record
    Mansion listed for $25M sets South Jersey record
    The Blue Man group and Astor Place Theater (Getty, Google Maps)
    New Yorkers increasingly living above where they work
    New Yorkers increasingly living above where they work
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...