The U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly announced that housing starts in August of 2019 has increased 12.3% to a seasonally adjusted rate of 1.364 million. This amount is 6.6% higher than the same time last year and the highest since 2007.
The highest rate of increase was in the multifamily sector where housing starts increased 32.8% to a seasonally adjusted rate of 445,000. Single-family construction increased 4.4% to 919,000. On a year to year basis only the Southeast has seen an increase of multifamily and single-family construction with an uptick of 4.4%. There has been declines in all other regions with the Northeast seeing a 1.8% decrease followed by the Midwest at 5.6% and West at 11.3%.
Joel Kan, Vice President of Economic and Industry Forecasting for the Mortgage Bankers Association believes that low mortgage rates and increased confidence in the job market have made builders more open to building. Kan also stated “Permits for new single-family construction increased for the fourth straight month, which is positive sign for prospective homebuyers and the housing market.”
On the builder’s side of sentiment, Greg Ugalde, chairman of the National Association of Home Builders (NAHB) believes that the report falls in line with their projections. He goes on to say “However, builders continue to wrestle with affordability concerns stemming from excessive regulations and other supply-side challenges.” Chief Economist Robert Dietz for the NAHB believes that the signs indeed positive but the year overall has been forgettable. “Housing has been on an upswing in recent months as the pace of permits and starts has been rising since spring. While these are positive developments, single-family starts are down 2.7 percent year-to-date as the catch up process continues.”
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