Construction Activity Boosted by Multifamily Sector

Increases in construction permits, starts, and completions for multifamily housing stand out from an otherwise lackluster batch of construction data issued on Friday by the U.S. Census Bureau and the Department of Housing and Urban Development.  Overall tallies of permits were relatively flat compared to August data.  Housing starts and completions were higher than in the previous month but both were driven by the multi-family sector. 

Permits for construction of privately owned residences were issued in September at a seasonally adjusted annual rate of 1,018,000, 1.5 percent above the revised (from 998,000) August rate of 1,003,000 units.  The August rate was 2.5 percent higher than a year earlier.

Single-family construction permits were issued at a rate of 624,000, down 0.5 percent from August's slightly revised estimate of 624,000.  Permits for construction of units in building with five or more units were 7.0 percent higher than the previous month at an annual rate of 369,000.

On a non-adjusted basis there were 89,600 residential construction permits issued in September, up from 87,200 in August.  Single family permits declined from 55,000 to 53,700.  Permits for construction of units in buildings with five or more rose from 29,300 in August to 33,400 in September.

Housing starts overall were at a seasonally adjusted annual rate of 1,017,000, an increase of 6.3 percent from the previous month and 17.8 percent higher than one year earlier.  August starts were revised upward slightly to 957,000 units.

The September increase in starts was largely due to an 18.5 percent jump in construction starts for multifamily units.  These rose from 298,000 in August to 353,000 in September, erasing part of the 31 percent drop the previous month. Single family starts were at a rate of 646,000, 1.1 percent higher than the previous month.

On a non-adjusted basis there were 93,200 units started in September compared to 86,000 in August.  Single-family construction accounted for 56,900 of the starts, down from 58,500 a month earlier and multifamily starts rose from 25,800 units in August to 34,500 in September.

Housing completions were up 8.6 percent from August to a seasonally adjusted annual rate of 999,000 from 920,000 in August.  An increase of 26 percent in multifamily unit completions, or about 76,000 more units annually than in August accounted for most of that increase.  Single family completions were at a rate of 624,000, an increase of 1.0 percent.  Overall completions were 31.3 percent higher than in September 2013 but multifamily completions posted an annual increase of 93.7 percent.

On an unadjusted basis there were 92,800 units completed in September compared to 88,500 in August.  Single family completions rose by 1,900 units to 56,600 and multi family unit completions were up from 32,600 to 35,500.

At the end of September there were 109,600 permits which had been issued but under which construction had not yet begun.  About 56,700 of these were for single family construction and 62,700 were for homes to be built in the South. 

Also at the end of the reporting period there were 804,000 housing units under construction on a non-annualized basis.  This includes 426,900 multi-family units and 364,700 single family houses. 

Permits in the Northeast were up 12.3 percent from the previous month and 19.0 percent from September 2013.  Housing starts rose 5.3 percent and 23.7 percent for the two periods and completions were up by 50.5 percent and 84.0 percent.

In the Midwest permits rose 8.2 percent for the month but were down 2.8 percent on an annual basis.  Housing starts were up 3.5 percent for the month and 8.6 percent compared to a year earlier. Units were completed at a rate 4.8 above the previous month and were 40.0 higher than in September 2013.

The South saw a drop of 4.7 percent the number of permits issued compared to August and 4.5 percent compared to the previous September.  Starts were 4.2 percent and 16.9 percent above levels the previous month and year.  The housing completion rate rose 7.1 percent and 20.0 percent respectively.

There was an increase of 5.9 percent in permits issued in the west and a 16.9 percent jump year-over-year.  Housing starts rose 13.9 percent from August to September and were 25.0 percent higher than a year earlier.  Housing completions fell in September by -5.3 but remained 25.8 percent higher than the previous September.