Housing starts in August were at a seasonally adjusted annual rate of 1.356 million, an increase of 9.6% compared with July and an increase of 3.9% compared with August 2023, according to estimates from the U.S. Census Bureau and U.S. Department of Housing and Urban Development.
Starts of detached single-family homes were at an annual rate of 857,000, an increase of 15.8% compared with July.
Starts of multifamily units were at a rate of 333,000, a decrease of 6.7% compared with July.
Building permits were at a seasonally adjusted annual rate of 1.475 million, which is up 4.9% compared with July but down 6.5% compared with August 2023.
Permits for single-family homes were at a rate of 967,000, and increase of 2.8% compared with July.
Permits for multifamily dwellings were at a rate of about 451,000, an increase of 8.4% compared with the previous month.
Housing completions were at a seasonally adjusted annual rate of 1.788 million, which is up 9.2% compared with July and up a whopping 30.2% compared with August 2023.
“Housing starts in August rebounded from July’s dip to the lowest level since May 2020,” says Sam Williamson, senior economist for First American, in a statement. “The monthly increase was driven by a 16 percent jump in single-family starts to a seasonally adjusted annual rate of 992,000.”
“Single-family permits, a leading indicator of future starts, also rebounded, but remain down 6 percent from their recent 2024 peak,” Williamson says. “The increase in August follows several months of declines, perhaps pointing to a stabilization in single-family permits.”
Williamson notes that the report “aligns with homebuilder sentiment, which rebounded this month from the lowest level since December 2023 reached last month in the face of elevated mortgage rates.”
In a separate statement, Carl Harris, chairman of the National Association of Home Builders (NAHB), says “demand remains strong despite several supply-side challenges.”
“The rise in single-family construction mirrors an uptick in NAHB’s latest builder survey,” Harris says. “However, builders continue to face a challenging environment due to rising construction costs.”
“With the Federal Reserve expected to begin the first of a series of rate reductions today, the loosening monetary policy over the coming months will boost new home building by lowering the construction loan rates for builders,” adds Danushka Nanayakkara-Skillington, assistant vice president for forecasting and analysis for NAHB. “The rise in single-family permits is further good news for the industry, which was hit hard by tight monetary policy in the first half of this year.”
Photo: Annie Gray