Single Family Home Construction On the Rise for the Fourth Straight Month
Despite an overall decline in homebuilding in September, construction starts on single-family dwellings increased for the fourth month in a row.
According to data from the U.S. Census Bureau, single family home construction in the United States in September 2019 rose to an annual rate of 918,000 units, which marks four straight months of continued growth in the area. Overall, housing starts fell 9 percent to an annual rate of 1.26 million units.
That decline was due to a sharp drop-off in the construction of multifamily housing units, which were down in all four regions of the country. Despite that drop off, experts remain optimistic in the housing market due to recent trends of low mortgage rates and solid job growth throughout the broader economy.
“The second half of 2019 has seen steady gains in single-family construction, and this is mirrored by the gradual uptick in builder sentiment over the past few months,” said NAHB Chief Economist Robert Dietz. “However, builders continue to remain cautious due to ongoing supply side constraints and concerns about a slowing economy.”
Home builders echoed economist’s optimism in the most recent Housing Market Index, a survey conducted by the National Association of Home Builders to gauge how builders feel regarding current single-family home sales as well as the next six months of sales. If the HMI is over 50, that means that more home builders view conditions as good rather than poor. In October, the HMI was 71, marking the highest point since February 2018 and the first time the index was over 70 in 2019.
“The upward trend for single-family construction aligns with other housing data that show strong demand for new homes by home buyers in response to lower mortgage rates and rising incomes,” senior economist Ben Ayers of Nationwide told MarketWatch.
While permits to build new houses dropped 3 percent from August to September, the number of permits filed was still 8 percent earlier than it was at the same time last year. Single-family housing makes up close to 75 percent of all U.S. homes.
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