Housing Starts Rise for 3rd Straight Month

By Inman News, Tuesday, October 19, 2010.

Homebuilders broke ground on more new homes in September for the third straight month, according to a report by the U.S. Census Bureau and the Department of Housing and Urban Development (HUD).

Private housing starts hit a seasonally adjusted annual rate of 610,000 last month — the highest level in five months and a 28 percent gain from the lowest level ever recorded by the Census Bureau: a rate of 477,000 in April 2009.

Last month’s rate is also a 0.3 percent increase from an upwardly revised rate of 608,000 in August and a 4.1 percent jump from 586,000 in September 2009, according to the report.

“Today’s numbers are in line with our latest builder surveys, which indicate that stability is slowly returning to the new-homes market following the declines we saw upon expiration of the homebuyer tax credits and the slowing of economic growth this summer,” said David Crowe, chief economist for the National Association of Home Builders, in a statement.

At 452,000, the rate of single-family starts accounted for a 74 percent share of private housing starts in September. Groundbreakings for single-family homes rose 4.4 percent from August, to 452,000, while multifamily starts comprised of five or more units fell 6.8 percent month-to-month.

On a year-over-year basis, however, single-family starts were down 10.8 percent while multifamily starts rose a whopping 114.3 percent.

Total private housing starts peaked in January 1972 at 2.49 million. The peak for the latest housing boom was in January 2006 at 2.27 million. September’s figure was 73.2 percent below this latest peak.

Regional figures were uneven. Compared to September 2009, the West saw the biggest increase in total private housing starts, 12.8 percent, to 132,000. At the same time, however, single-family starts fell 11 percent.

The Northeast saw the second-biggest regional year-over-year jump in housing starts, up 7.5 percent to 72,000. It was also the only region to see single-family starts rise during that time: gaining 17.6 percent.

The South, which accounted for exactly half of the nation’s housing starts at a rate of 305,000, saw a 2.7 percent increase from September 2009. Single-family starts fell 17 percent from that time.

The Midwest was the only region to experience a year-over-year drop in housing starts: down 3.8 percent, to 101,000. Single-family starts fell 8.2 percent.

Authorizations for building permits fell 5.6 percent month-to-month and 10.9 percent year-over-year in September, to 539,000. Permits for single-family homes, which made up three-quarters of permits issued, rose 0.5 percent compared to August but fell 14.4 percent compared to September 2009.