Housing starts in September were at a seasonally adjusted annual rate of 1,256,000, 9.4% below the revised August estimate of 1,386,000 but 1.6% above the September 2018 rate of 1,236,000. Single‐family housing starts in September were at a rate of 918,000, 0.3% above the revised August figure of 915,000. The September rate for units in buildings with five units or more was 327,000.
Building permits in September were at a seasonally adjusted annual rate of 1,387,000, 2.7% below the revised August rate of 1,425,000 but 7.7% above the September 2018 rate of 1,288,000. Single‐family authorizations in September were at a rate of 882,000, 0.8% above the revised August figure of 875,000. Authorizations of units in buildings with five units or more were at a rate of 470,000 in September.
Housing completions in September were at a seasonally adjusted annual rate of 1,139,000. This is 9.7% below the revised August estimate of 1,262,000 and is 1.0% below the September 2018 rate of 1,150,000. Single‐family housing completions in September were at a rate of 852,000, 8.6% below the revised August rate of 932,000. The September rate for units in buildings with five units or more was 285,000.
Joel Kan, associate VP of economic and industry forecasting for the Mortgage Bankers Association, sized up the numbers. “Housing starts fell 9% in September, led by a 28% drop in multifamily starts. The decline in multifamily starts was a reversal from a 41% increase in August. The 3-month average was down around 3%. More importantly to home purchase market, single-family starts remained robust, increasing slightly to a pace of 918,000 units – the highest since May 2019. However, the increase in single-family starts was solely concentrated in the South. Most of the country still needs more new construction to meet job growth and demand. It is promising that single-family permits continued to rise, increasing for the fifth consecutive month. As reported earlier today in MBA’s September Builder Applications Survey, some of the weakness in the data in September was likely the result of increased market volatility and uncertainty. Overall, the underlying trends remain relatively strong. The upward trend in single-family starts and permits bodes well for increased housing supply in the coming months, which has been a limiting factor for housing growth for a number of years.”
Lawrence Yun, chief economist for the National Association of Realtors, sounded a familiar theme in response to the report. “The housing industry is plagued by a shortage of inventory. Apartment vacancy rates are low and the number of homes listed for sale are just not enough. Naturally, developers should be boosting home construction to relieve the tight supply. To a degree, it is moving in the right direction: single-family housing starts rose a notch in September and are higher by 4% from a year ago. But multifamily housing starts, which have been predominately apartments and not condominiums, sharply declined by 28% in September and are down 6% from a year ago. With new condo-rules on FHA mortgages, developers should anticipate rising demand for multifamily units. Building more homes is needed to help address housing affordability for both renters and home buyers. Increased supply will manage rent affordability, rather than the terrible policy of rent control. Furthermore, more home building will help boost economic growth. It is very likely that the GDP growth rate in the second half of this year will be light at under 2%. To get it moving higher, housing starts need to significantly ramp up.”
