Subtle Improvement in September Housing Starts


Single family housing starts increased 4.4% in September to a seasonally-adjusted level of 452,000 after the summer lull.  Single family permits were virtually unchanged nationally and fell in only the South region. 

All of the action in the September report was in the multifamily component (buildings with two or more units), where starts fell almost 10% and permits fell 20%.  The decline was due to unusually high levels in August in a series that is often volatile.  The three month moving average of 2+ units was up 18%.

Completions were up 7.3% for the second month in a row as builders continued to bring their inventory to market.  The October NAHB-Wells Fargo Housing Market Index rose 3 points to 16 as further evidence that builders are slowly regaining confidence as potential home buyers cautiously return to shopping for a new home.

Another indicator of caution is the very low level of single family homes under construction, which fell again in September for the fifth straight month to 269,000, establishing another record low since the data were collected in 1970.  As demand returns, the pipeline of new homes may be difficult to resupply, especially as builders continue to be denied credit to build.

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