2024Issue10 BuildersOutlook
10
Single-Family Starts Trend Higher in September
With the Federal Reserve beginning an easing of monetary policy and builder sentiment improving , singlefamily starts posted a modest gain in September while multifamily construction continued to weaken because of tight financing and an ongoing rise in completed apartments .
Overall housing starts decreased 0.5 % in September to a seasonally adjusted annual rate of 1.35 million units , according to a report from the U . S . Department of Housing and Urban Development and the U . S . Census Bureau .
The September reading of 1.35 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months . Within this overall number , single-family starts increased 2.7 % to a 1.03 million seasonally adjusted annual rate . On a year-todate basis , single-family construction is up 10.1 %. The multifamily sector , which includes apartment buildings and condos , decreased 9.4 % to an annualized 327,000 pace . This marks the weakest pace since May .
“ Single-family construction increased in September , mirroring NAHB ’ s survey of builder confidence ,” said Carl Harris , chairman of the National Association of Home Builders ( NAHB ) and custom
home builder from Wichita , Kan . “ In the long-run , the most effective way to tackle the nation ’ s housing affordability crisis is to increase the housing supply . And as the election looms , policymakers need to be focused on the supply-side of the market to let builders build .”
“ While single-family home building increased in September , higher mortgage interest rates in October are likely to place a damper on growth in next month ’ s data ,” said NAHB Chief Economist Robert Dietz . “ Nonetheless , NAHB is forecasting a gradual , if uneven , decline for mortgage rates in the coming quarters , with corresponding increases for singlefamily construction . Multifamily construction will remain weak as completions of apartments are elevated .”
On a regional and year-to-date basis , combined single-family and multifamily starts are 9.0 % higher in the Northeast , 2.0 % lower in the Midwest , 4.6 % lower in the South and 5.4 % lower in the West .
Overall permits decreased 2.9 % to a 1.43 million unit annualized rate in September . Single-family permits increased 0.3 % to a 970,000 unit rate . Multifamily permits decreased 8.9 % to an annualized 458,000 pace . This is
the weakest reading since May . Looking at regional data on a year-to-date basis , permits are 0.8 % higher in the Northeast , 2.6 % higher in the Midwest , 2.2 % lower in the South and 5.1 % lower in the West .
The number of single-family homes under active construction totaled 642,000 in September . After stabilizing recently , this is down just 4.5 % from a year ago . The number of multifamily units under construction declined 3.4 % in September to an 842,000 total . This is 16.5 % lower than a year ago and is the smallest count since February 2022 .
As a sign of the reversal for multifamily construction , the seasonally adjusted annual rate of multifamily construction was 680,000 in September . This was roughly twice the pace of multifamily starts , meaning for every two apartments finishing construction , only one new unit began construction . The pace of multifamily completions was up 41 % compared to a year ago .