Due to a decline in starts for multi-family housing, total housing starts fell by 9.4% in September, according to a report from the U.S. Housing and Urban Development (HUD) and Commerce Department (DOC).

The September reading of 1.26 million starts is the number of housing units builders would begin if they kept this pace for the next 12 months. Within this overall number, single-family starts increased by 0.3% to 918,000 units. The multifamily sector, which includes apartment buildings and condos, fell by 28.2% to a pace of 338,000.

“Single-family builders continue to see positive conditions for housing, and this is reflected in NAHB’s Housing Market Index, which measures builder sentiment,” said Greg Ugalde, chairperson of the National Association of Home Builders (NAHB) and a home builder and developer from Torrington, Conn. “However, builders are still being somewhat cautious as they continue to deal with supply-side challenges which impact housing affordability.”

On a regional and year-to-date basis, combined single-family and multi-family starts in September rose in the South (6.0%). Starts declined in the Northeast (-0.6%), Midwest (-6.2%) and West (-12.2%).

“Multifamily housing starts fell from an unsustainably high level in August and are running at a solid pace despite the sharp monthly decline,” said NAHB chief economist Robert Dietz. “Meanwhile, the rebound for single-family construction continues. Single-family permits have increased since April, and single-family starts have posted gains since May. In another positive development, September marked the first monthly increase for the number of single-family homes currently under construction since January.”

Overall permits, which are a harbinger of future housing production, fell 2.7% to a 1.39 million unit annualized rate in September. Single-family permits increased 0.8% to an 882,000 rate, while multifamily permits declined 8.2% to a pace of 505,000.

Looking at regional permit data on a year-to-date basis, permits rose in the Northeast (8.1%) and South (3.4%) and fell in the Midwest (-4.9%) and South (-3.5%).


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