Single-family construction starts continue their strong growth, according to the federal government's latest report on that closely watched metric. Single-family housing starts in September were at a rate of 1.11 million, up 8.5% from the revised August rate of 1.02 million, according to the monthly new residential construction figures released Tuesday by the U.S. Department of Housing and Urban Development and the Census Bureau.
Meanwhile, privately owned housing starts -- which add in the estimated 390,000 buildings of five units or more, in September were at a seasonally adjusted annual rate of 1.42 million, up 1.9% from the revised August estimate of 1.39 million and a whopping 11.1% above the September 2019 rate of 1.27 million.
The gains are nationwide. Year to date, combined single-family and multifamily starts are up 3.7% nationwide, including 9.9% for single-family homes from January to September in 2019. By region, the figures are minus 4.1% overall for the Northeast but plus 7.1% for single-family homes; 4.5% and 9.9%, respectively, for the Midwest; 6.4% and 12.0% for the South; and 0.5% and 5.8% for the West.
Builders are confident despite some 'headwinds'
Tuesday's report follows by a day a similarly glowing report from the National Association of Homebuilders (NAHB) itself, which says that builder confidence is at a record high in its NAHB/Wells Fargo Housing Market Index.
The trade group's chief economist, Robert Dietz, notes that new home sales exceed for-sale home construction, which should encourage yet more building in the near term, and that those numbers could be even higher if supplies -- notably lumber -- were more plentiful.
Of today's HUD/Census report, Dietz says, "Demand is being supported by low interest rates, a suburban shift in demand, and demographic tailwinds. However, headwinds due to limited building material availability is slowing some construction activity despite strong demand, with authorized but not started single-family homes up 22.4% compared to a year ago."
Housing remains a bright spot, but pandemic is surging, too
Today's census report continues the industry narrative that housing is leading an economic recovery from the debilitating effects of the pandemic.
"The housing market remains a bright spot in the U.S. economy, and this is reflected in today's positive housing starts report," NAHB Chairman Chuck Fowke, a custom homebuilder from Tampa, Florida, says in the trade group's press release. "Builder confidence is at an all-time high as buyer traffic is strong -- another sign that housing is helping to lift the economy."
Sales of existing homes, along with prices, have been rising steadily since late spring, too, making it tough for both investors and homebuyers to find good deals, especially in stronger markets, but a good time to sell if the timing is right.
Whether this trend can withstand the pressures of a resurgent pandemic and persistent joblessness issues remains to be seen.