Starts Decline After Two Months of Healthy Gains
Permits Up Slightly; Completions Down Modestly
After two months of gains, including a substantial jump in June, combined housing starts dropped 5.8 percent in August, the U.S. Census Bureau reports. Permits recorded a small gain, and completions were also down for the month.
However, the year-to-year data is a bit better. Combined single-family and multifamily housing starts, at 1,142,000 units for the month, are 0.9 percent higher versus August 2015.
Housing starts surged 4.8 percent from May to June, and then jumped another 2.1 percent from June to July.
Single-family starts (722,000 units) declined 6.0 percent month-over-month, and are down 1.2 percent from a year ago. Multifamily (403,000 units) dropped 6.9 percent compared to July, but has increased 2.3 percent on an annual basis.
"After two months of gains, the housing market gave back a bit in August," said Ed Brady, chairman of the National Association of Home Builders (NAHB). "However, with builders reporting low inventory levels and rising confidence, we expect more consumers will return to the market in the months ahead."
Combined permits (1,139,000 units) inched higher by 0.4 percent from July to August, but dropped 2.3 percent from a year earlier. Single-family permits increased 3.7 percent month-over-month, and are 3.8 percent higher from August 2015. Multifamily permits shed 8.4 percent versus July, and declined 13.1 percent from a year earlier.
"August represents a one-month blip in what has been a long-term, gradual recovery," said Robert Dietz, NAHB chief economist.
The 1,043,000 housing completions in August represent a 3.4 percent drop from July, but an 8.3 percent hike compared to the same month in 2015. Single-family completions were 0.3 percent lower month-over-month, but 13.3 percent higher from a year ago. Multifamily was down 11.0 percent versus July, and has dropped 3.1 percent compared to August 2015.
The Northeast and Midwest posted sizable monthly gains in combined starts with hikes of 7.6 percent and 5.6 percent, respectively. Starts increased in the West by 1.8 percent, while the South registered a 14.8 percent decline from July to August.