According to U.S. Commerce Department data, total housing starts jumped 10.5% in August, putting new residential building back on pace to where it was prior to the close of the tax credit ending earlier this year. The news is mixed in that single family starts only rose 4.3% and is still 9.1% below August 2009. Multifamily however saw a substantial 32.2% uptick in starts.
Permits issued rose 1.8% in August, and according to the National Association of Home Builders (NAHB), builder sentiment remained unchanged in August. The lack of movement in the sentiment is likely in part to a rise in optimism about increasing starts yet a decline in the ability to obtain financing, leaving builders to remain cautious.
“The housing market has been in a holding pattern as the economy stalled in the second and third quarters. Construction activity returned to pre-home buyers tax credit levels in August as builders replaced sold single family homes and begin replenishing apartment building supply after a three year steady decline in multifamily construction,” said NAHB Chief Economist David Crowe.
“The vast majority of builders in this country operate small, single-family homebuilding firms and they are struggling to obtain acquisition, development and construction financing that will enable them to meet the current level of buyer demand and put more Americans back to work,” said Bob Jones, chairman of the National Association of Home Builders and a home builder from Bloomfield Hills, Michigan.
Although geographically, the Northeastern region slide a drastic 24.3%, the Midwest rose 21.7%, the South was up 7% and the West rose 34.3% in start volume. While the west saw a large rise in starts, it also had a 19% rise in permits issued, so this will certainly be a region to watch as it has quite a bit more activity currently than the others