Housing Starts Rise 15 Percent in September Thanks to Multi-Family GainsOctober 19th, 2011 by DWM Magazine
Some good news today from the U.S. Commerce Department: housing starts rose 15 percent to a seasonally adjusted annual rate of 658,000 units in September, marking the strongest pace of residential construction since April of 2010. The gain was largely attributed to a sharp increase on the multi-family side, which has been trending upward due to increased demand for rental apartments, according to the National Association of Home Builders (NAHB).
“The big gain in multi-family housing production for September was in the wake of a below-trend number in August and in keeping with characteristic volatility in that sector,” says NAHB chief economist David Crowe. “However, there’s no doubt that demand for apartments is rising as restrictive mortgage lending policies and concerns about future employment push consumers to pursue rental options.
“Single-family starts showed a slight uptick for the month, which was right in line with our forecast for the third quarter and in keeping with what builders have been telling us in recent surveys regarding the emergence of improving conditions in select local housing markets,” he adds.
Single-family housing starts rose 1.7 percent to a seasonally adjusted annual rate of 425,000 units in September, regaining much of the ground lost in August. Multi-family starts rose 51.3 percent to a seasonally adjusted annual rate of 233,000 units, their highest level since October of 2008.
Regionally, starts rose across the board in September, with a 12.7 percent gain in the Northeast, a 9.3 percent gain in the Midwest, a 15.7 percent gain in the South and an 18.1 percent gain in the West.
Building permits, which can be an indicator of future building activity, fell 5.0 percent to a seasonally adjusted annual rate of 594,000 units in September following a big gain in the previous month. Single-family permits held virtually unchanged at 417,000 units while multi-family permits declined 14.5 percent to 177,000 units, according to the NAHB.