New Home Starts Up 3.9%; Multi-family Outpaces Single-Family

In an article on by Senior Economist, George Ratiu gave a new housing update.

The pace of new construction reflected homebuilder shifts toward higher margin projects amid fluctuating costs. As August saw homebuilder sentiment dip over concerns of slipping buyer traffic and sales, builders sought permits for more multi-family projects. However, this week’s September sentiment numbers show a rebound is in the works, as residential construction companies work through their order backlog and look forward to increased traffic heading into 2022.

Permits rose 6.0% from July, and were 13.5% higher than a year ago, driven by multi-family activity. Meanwhile, starts increased 3.9% from the prior month, to 1.62 million annualized units, and were up 17.4% from a year ago, on the strength of buildings with five units or more. Completed homes, ready for sale, slid 4.5% from the prior month, but were 9.4% above July 2020. Importantly, single-family home completions advanced 2.8% from the prior month, on solid activity in the Northeast and South.

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