Single-Family Housing Continues Growth in August

Filed in Economics, Multifamily by on September 17, 2020 267 Comments

Single-family starts showed continued growth in August but overall housing production fell 5.1% to a seasonally adjusted annual rate of 1.42 million units due to a double-digit percentage decline in multifamily production, according to a report from the U.S. Housing and Urban Development and Commerce Department. The pace of single-family starts in August was the highest production rate since February.

The August reading of 1.42 million starts is the number of housing units builders would begin if they kept this pace for the next 12 months. Within this overall number, single-family starts increased 4.1% to a 1.02 million seasonally adjusted annual rate. The multifamily sector, which includes apartment buildings and condos, decreased 22.7% to a 395,000 pace.

“Consistent with surging builder confidence, single-family starts rose in August to meet rising buyer traffic,” said NAHB Chairman Chuck Fowke. “Builders continue to face concerns in terms of rising lumber prices and supply chain shortages of other building materials.”

“Total housing starts were down in August on a decline for multifamily construction, with multifamily 5+ unit permits now down 8.3% on a year-to-date basis,” said NAHB Chief Economist Robert Dietz. “But low interest rates and solid demand are spurring single-family construction growth, which makes up the bulk of the housing market. Single-family permits continue to rise as well, and are now up almost 7% on a year-to-date basis.”

On a regional and year-to-date basis (January through August of 2020 compared to that same time frame a year ago), combined single-family and multifamily starts are 13.6% higher in the Midwest, 5.4% higher in the South, 3.8% higher in the West and 4.5% lower in the Northeast.

Overall permits decreased 0.9% to a 1.47 million unit annualized rate in August. Single-family permits increased 6.0% to a 1.04 million unit rate. Multifamily permits decreased 14.2% to a 434,000 pace.

Looking at regional permit data on a year-to-date basis, permits are 2.6% higher in the Midwest, 4.8% higher in the South, 8.2% lower in the Northeast and 1.3% lower in the West.

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