U.S. Housing Starts Up on Multifamily Construction

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The FINANCIAL — U.S. homebuilding rebounded in September, driven by a boost in multifamily construction, according to Nasdaq.

Housing starts rose 6.5% from a month earlier to a seasonally adjusted annual rate of 1.21 million in September, the Commerce Department said on October 20. Starts of single-family homes, which make up nearly two-thirds of the market rose 0.3% . Multifamily units, which include apartments and condominiums, surged 18.3%.

New applications for building permits, an indication of future construction, fell 5% to a seasonally adjusted annual rate of 1.1 million.

Economists surveyed by The Wall Street Journal had expected September housing starts to reach a rate of 1.15 million and 1.16 million building permits to be issued.

Home construction figures can be volatile and subject to significant revisions. Tuesday’s report showed new-home starts for August revised to a 1.7% decline, compared with an initial estimate of a 3% decrease.

Housing construction remains subdued by historical standards even though other indications suggest the housing market may be firming. New home sales rose in July and August although sales have yet to reach their prerecession levels. Sales of existing homes, however, slipped in August, perhaps because of rising prices.

Low interest rates, a stronger job market and rising rents have led more people to look for homes to buy. But a shortage of supply in some areas combined with wages that have been slow to rise may make purchases difficult.

Homebuilders remain hopeful, despite the uncertainty in the housing market. An index of homebuilder confidence released Monday by the National Association of Realtors rose to 64, higher than expected.

Another gauge of the housing market will come Thursday when the National Association of Realtors releases new data on existing home sales.

Tuesday’s report showed housing starts rose a seasonally adjusted 25.4% between August and September in the West and 23.4% in the Northeast. Starts were essentially flat in the South, rising 0.6% and down 12.2% in the Midwest.

 

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