Housing Starts Still Under The Weather; Single-Family Permits on The Mend

The U.S. Census Bureau is mum on causation, but results from the southern region would indicate that the August and September hurricanes probably drove declines in both housing permits (except those for single-family residences) and housing starts in September. Both were down by over 4 percent compared to their August numbers, although housing starts had previously been very weak. Housing completions did rise.

The Bureau, in conjunction with the Department of Housing and Urban Development, reports that housing permits nationwide were issued at a seasonally adjusted annual rate of 1,215,000, down 4.5 percent from the August estimate of 1,272,000 units. The August number is a revision from the original estimate of 1,300,000.  The September results and the August revision dropped the rate of permitting behind that of a year earlier by 4.3 percent.

The permitting number was as the low end of analysts' estimates which ranged from 1.190 million to 1.280 million. The consensus of those polled by Econoday was for 1.238 million permits.

Single family permits were issued at an annual rate of 819,000, up 2.4 percent from the 800,000-unit estimate for August. Single family permits are now running 9.3 percent ahead of the year-ago rate. Permits for units in building with five or more were at a rate of 360,000, down 17.4 percent month-over-month and 25.3 percent on an annual basis.

On a non-seasonally adjusted basis there were an estimated 100,500 residential construction permits issued in September, down from 119,600 in August.  Permits for single-family units dropped by slightly less than 10,000 to 66,300.

Housing starts suffered a similar setback, falling by 4.7 percent to a seasonally adjusted annual rate of 1,127,000. It was the sixth straight month that housing starts have declined, however they remain 6.1 percent above the rate of starts in September 2016.  The August estimate of 1,180,000 housing starts was revised slightly higher, to 1,183,000. 

Starts came in only slightly below the Econoday consensus of 1.238 million. Analysts' forecasts ranged from 1.150 million to 1.280 million.  

Single-family starts were at a rate of 829,000, 4.6 percent lower than the revised (from 851,000) 869,000-unit estimate for August, and 5.9 percent higher than a year earlier. Multifamily units were started at a 286,000-unit rate, down 6.2 percent from August but 7.9 percent above the level in September 2016.

On a non-adjusted basis, construction was started on 101,300 residential units in September 72,300 of which were single-family dwellings. The non-adjusted August numbers were 103,800 and 77,900 respectively.

Completions rose in September by 1.1 percent to 1,109,000 units on a seasonally adjusted basis from the revised (from 1,075,000) August estimate of 1,097,000 units. Completions are now 10.3 percent ahead of those for the same period in 2016.

Single family homes were completed at a rate of 781,000 units, up 4.6 percent from August and 8.8 percent higher than a year earlier. Multifamily unit completions were estimated at 322,000, down 7.2 percent for the month but 17.9 percent higher on an annual basis.

On a non-adjusted basis, there were 99,300 units of housing completed during the month, 69,400 of which were single-family units. In August, total completions numbered 103,400, 65,800 of which were single-family units.

At the end of the reporting period there were an estimated 1,082,000 housing units under construction nationwide, 476,000 of which were single-family dwellings. In addition, there were an estimated 149,000 permits that had been authorized but for which construction had not started. Seventy-seven thousand of the outstanding permits were for single-family houses.

There was a gain of 9.2 percent in the number of permits issued in the Northeast, although there were 16.2 percent fewer on an annual basis. Housing starts were down 9.2 percent month-over-month but were up 4.2 percent from the previous September. Completions dropped by 41.1 percent from August and were 14.4 percent below a year earlier.

Permits in the Midwest eked out an 0.5 percent increase from the previous month and were 2.2 percent higher than in September 2016. Housing starts were down 20.2 percent for the month, but up 2.7 percent year-over-year. There were 3.4 percent more units completed than in August and a 54.2 percent gain from a year earlier.

The South saw permits drop 5.6 percent from the September rate and were 5.3 percent below the previous September. Housing starts were also down, 9.3 percent and 2.2 percent from the two earlier periods.  Completions were up, gaining 13.0 percent over August and were up 10.2 percent for the year.

Permitting fell in the West by 9.2 percent and was 0.9 percent lower than a year earlier. Starts displayed real strength, rising 15.7 percent compared to August and were 24.8 percent higher than the previous September. Completions dipped 1.6 percent from the August rate and 0.4 percent from the September 2016 estimate.