Housing starts posted “healthy gains” in recent weeks as homebuilders feel more confident about the new-home market, the National Association of Home Builders reports.
Led by an increase in multifamily production, total housing starts surged 12.3% in August, reaching a seasonally adjusted annual rate of 1.36 million units, the Commerce Department reported Wednesday. This marks the highest level since May 2007.
Single-family starts rose 4.4% in August, reaching 919,000 units. The multifamily sector, which includes apartment buildings and condos, led the gains in August at a jump of 32.8%, to a 445,000 pace.
“Housing has been on an upswing in recent months as the pace of permits and starts has been rising since spring,” says Robert Dietz, the NAHB’s chief economist. “While these are positive developments, single-family starts are down 2.7 percent year-to-date as the catch-up process continues.”
Builders continue to wrestle with affordability concerns from “extensive regulations and other supply-side challenges,” such as lot and labor shortages, adds Greg Ugalde, the NAHB’s chairman.
Regionally, combined single-family and multifamily starts in August rose 4.4% in the South, while falling 18% in the Northeast, by 5.6% in the Midwest, and by 11.3% in the West.
However, last month’s overall increase in construction nationwide should continue in the coming weeks. Housing permits, a gauge of future production, ticked up 7.7% last month to a pace of 1.42 million annualized units. Single-family permits rose 4.5% to a 866,000 rate, while multifamily permits increased 13.3% to a 553,000 pace.