WASHINGTON (10/21/15)--Housing construction activity continues to improve, as seasonally adjusted housing starts jumped 6.5% in September and 17.5% on a year-over-year basis for the month, according to numbers released Tuesday by the Census Bureau (Economy.com Oct. 20).
Multifamily unit construction starts drove the gains, surging 17% in September and 28.6% annually, while single-family starts lagged behind with a meager 0.3% increase.
Still, single-family starts rose 12% for the month on a year-over-year basis.
“Single-family construction is recovering slowly, but is still below its pre-housing bubble pace, to say nothing of construction at the peak of the boom,” said Andres Carbacho-Burgos, Moody’s analyst (Economy.com). “By contrast, multifamily construction is back to its prerecession pace, but will slow in the coming months as the permits pipeline slows down.”
By region, the Northeast recorded the highest annual gain in September with a 25.7% increase, followed by the West with a 27.5% jump and the South with a 23.2% increase. The Midwest was the only region to post a yearly decline, with starts down 18.9%.
Home completions, meanwhile, climbed 7.5% in September and 8.4% on a year-over-year basis. Similar to housing starts, completion totals were buoyed mostly by multifamily units.
Perhaps signaling a slowdown in housing construction, permits dropped by 5% during the month despite climbing 4.7% on an annual basis.
“Also, the monthly decline was led by a drop in multifamily permits, so multifamily housing starts are likely to slow in the coming two to three months,” Carbacho-Burgos said.