August Housing Starts Stumble

Housing start in August fell by 5.8 percent in August, HUD and the Census Bureau reported yesterday.

The report said privately owned housing starts in August came in at 1.142 million, 5.8 percent below the revised July estimate of 1.212 million, but 0.9 percent higher than a year ago (1.132 million). Single-family housing starts in August fell by 6.0 percent to 722,000; the August rate for units in buildings with five units or more fell by nearly 7 percent to 403,000.

Regionally, the South accounted for nearly all of the decline in housing starts, falling by 14.8 percent in August to 543,000 units, seasonally adjusted, from July’s revised 637,000, and fell by 13.1 percent from a year ago. This more than offset increases in the other three regions. In the Northeast, starts rose by 7.6 percent in August to 141,000 units from 131,000 in July and improved by nearly 25 percent from a year ago. In the Midwest, starts rose by 5.6 percent to 171,000 units in August from 162,000 in July and rose by 17.1 percent from a year ago. In the West, starts rose by 1.8 percent in August to 287,000 units from 282,000 in July and improved by nearly 16 percent from a year ago.

Despite the drop in August, data for June and July revised slightly higher. Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C., said the year-to-date trend remained solidly positive, with starts up 6.1 percent.

“Despite the August drop, the recovery in single-family construction remains on track,” Vitner said. “Apartment construction is still going strong throughout much of the country but the pipeline of new projects is no longer growing.”

The report said privately owned housing units authorized by building permits in August fell to 1.139 million in August, 0.4 percent below the revised July rate of 1.144 million and 2.3 percent down from a year ago (1.166 million). Single-family authorizations in August fell by 3.7 percent to 737,000; authorizations of units in buildings with five units or more fell by 8.4 percent to 370,000.

Privately owned housing completions in August fell by 3.4 percent to 1.043 million from 1.080 million in July, but 8.3 percent higher than a year ago (963,000). Single-family housing completions in August fell by 0.3 percent to 752,000; the August rate for units in buildings with five units or more fell by 11 percent to 283,000.