Multifamily led a surge in new construction last month, while single-family activity drove up completed construction. But activity is likely to slow based on new permits.
Permit-issuing places authorized the construction of 114,800 new privately owned housing units during August. That brought year-to-date permits to 900,100.
The new construction data was based on a report jointly issued on Wednesday by the Census Bureau and the Department of Housing and Urban Development.
When the data is adjusted for seasonal variations, last month’s annual rate of permits worked out to
1.229 million, falling 6 percent from the downwardly revised level for the prior month and from the rate a year prior.
In the Northeast, the annual rate was 101,000, plunging from July by 19 percent — more than any other region. The West tumbled 8 percent to 304,000, the South slipped 3 percent to 646,000, and the Midwest was off 2 percent to 178,000.
Last month ended with a seasonally adjusted 166,000 houses authorized but not yet started.
Builders broke ground on new construction at a seasonally adjusted annual rate of 1.282 million during August. The rate leapt 9 percent from the preceding month’s upwardly revised number and the downwardly revised rate from a year previous.
Robert Dietz, chief economist for the National Association of Home Builders, didn’t seem impressed by the gain.
“Although we saw an increase in starts in August, we are likely to see softening in the market in the months ahead,” Dietz said in a written statement. “Affordability is a particular concern because of home price gains, due in part to the high regulatory burden on new home construction. Increasing costs for building materials prompted partially by recently imposed tariffs on a wide range of products are also a concern. Moreover, interest rates are continuing their gradual upward climb.”
While one-unit construction started was up 2 percent from July to an 876,000 annual rate, construction started on properties with five or more units skyrocketed 27 percent.
In the West, the rate soared 19 percent to 318,000. It rose 7 percent in the South to 674,000, and it was up 9 percent in the Midwest to 191,000. The Northeast was flat at 99,000.
As of Aug. 31, there were a seasonally adjusted 1.131 million housing units under construction.
Home builders completed construction on 111,700 housing units last month, bringing the year-to-date total to 788,100.
Seasonally adjusted completed construction was a rate of 1.213 million, rising 3 percent from the downwardly revised rate a month earlier and jumping 11 percent from the upwardly revised rate a year earlier.
On one-unit properties, construction was completed at a seasonally adjusted annual rate of 923,000, surging 12 percent from July. But multifamily construction plunged 19 percent to a rate of 285,000.
The total rate in the Midwest was 198,000, climbing 10 percent. The South increased 8 percent to 644,000.
But in the West completed construction fell 6 percent to 277,000, and it tumbled 15 percent in the Northeast to 94,000.
