Housing starts down, permits up
Housing starts dropped 5.0 percent in August, reports the U.S. Commerce Department today. Much of the decline was due to a “volatile multifamily side,” says the National Association of Home Builders (NAHB) with single family starts dipping only 1.4 percent alongside multifamily’s 13.5 percent drop in the same period. Builders haven’t thrown in the towel, however, as the Commerce Department notes permits for new construction of single family and multifamily homes rose a moderate 3.2 percent in August, their highest level since December 2010.
Regionally, housing starts rose 2.6 in the Midwest, 2.2 percent in the West, but dropped 3.3 percent in the South and a shocking 29.1 percent in the Northeast which Trulia’s Chief Economist Dr. Jed Kolko noted is due mostly to Hurricane Irene putting a damper on construction activity.
We reported yesterday that builder confidence levels remain stagnant, with levels nearly unchanged for the past 13 to 16 months, which the NAHB indicates is a sign that most housing indicators are equally stagnant with no major swings in the down economy this year.
“At this point, most builders are only looking to replenish their depleted inventories of new homes for sale, but otherwise holding off on new projects,” said National Association of Home Builders (NAHB) Chairman Bob Nielsen, a home builder from Reno, Nev. “While we would like to get more crews back on the job, we need to see solid improvement in consumer demand, greater access to credit for both builders and buyers, and a reduction in the number of foreclosed properties on the market before we can ramp up new production.”
“Today’s numbers are completely consistent with NAHB’s forecast for the quarter, and are in keeping with the anemic economic and job growth we are seeing across most of the country,” said NAHB Senior Economist Robert Denk. “That said, we continue to anticipate modest gains in new-home production through the end of this year with greater momentum building into 2013, and some pockets of improvement are already evident in about a dozen metros nationwide.”
