Single-Family Housing Starts See Bump in September

(Image courtesy of U.S. Census Bureau; Breakout image courtesy of Max Vakhtbovycn via pexels.com)

The U.S. Census Bureau and U.S. Department of Housing and Urban Development announced new residential construction statistics for September, including that single-family housing starts rose 2.7% from August.

Overall, privately-owned housing starts in September hit a seasonally adjusted annual rate of 1,354,000. That’s 0.5% below the revised August numbers and 0.7% below last year’s rate.

The September rate for units in buildings with five units or more was 317,000.

Building permits for privately-owned housing units were at a seasonally adjusted annual rate of 1,428,000, 2.9% below the revised August rate. It’s also a decrease of 5.7% year-over-year.

Single-family authorizations were at a rate of 970,000, up 0.3% from August’s revised 967,000. Authorizations of units in buildings with five units or more were 398,000.

“Permits are a leading indicator of future starts, and they increased for the third consecutive month in September, a positive sign for a supply-starved housing market,” noted First American Chief Economist Odeta Kushi. “The housing market remains structurally underbuilt, and homeowners with locked-in low mortgage rates are keeping existing-home inventory limited. More groundbreaking is needed to bridge the gap between supply and demand.”

Completions for the month hit a seasonally adjusted annual rate of 1,680,000, down 5.7% from August’s revised estimate, but up 14.6% from September 2023.

Single-family completions were at a rate of 1,000,000, a decrease of 2.7% from August’s revised estimate. The September rate for completions of units in buildings with five or more units was 671,000.

Kushi noted the more tepid numbers in multifamily construction.

“On the multifamily side, permits and starts are trending lower, while completions remain elevated. So, while a near-record number of apartments is coming to market now, new apartment construction starts are falling. Fewer construction starts today translate into fewer apartments that can be delivered to market tomorrow,” she said. “If multifamily construction starts continue to fall or remain low, then after this current batch of completed and under-construction apartments come to market, there won’t be a whole lot left to deliver in 2026. This is the ‘wave’ of new apartment supply that renters will ride over the next two-three years. A period of oversupply in some cities, followed by a balancing out of the market.”