US: Housing Starts strengthen in August

Data released on Tuesday showed Housing Start and Building Permits rose above expectations in August. Analysts at Well Fargo point out that multifamily units accounted for all the strength in starts, reflecting strong demand for apartments.
They mentioned builders are increasingly having to limit sales, as they are uncertain when they will be able to complete homes due to ongoing shortages of essential building materials.

Key Quotes:

“Housing starts rose 3.9% in August to a 1.615 million-unit annual pace and starts for the prior month were also revised modestly higher. Multifamily starts accounted for all of this past month's increase, rising 20.6% to a 539,000-unit annual rate. Demand for apartments has been surprisingly strong and rents have risen, giving developers confidence to move projects forward.”

“The strength in multifamily starts is not coming at the expense of single-family construction. The single-family market is experiencing shortages in essential building materials and skilled construction workers.”

“The most encouraging aspect of the September HMI is the slight improvement in underlying demand. The present sales index rose one point to 82, following four months of decline. Prospective buyer traffic also improved, although it remains well below levels seen earlier this year.”

“The influx of buyers from higher-priced housing markets has skewed new home sales more toward the upper-end of the price spectrum. Builders have focused their attention at this end of the market as well, contributing to the dearth of more affordable homes currently on the market.”

“While single-family starts and permits both declined in August, the backlog of permitted homes where construction has not yet started rose 1.4% and is now 50% higher than it was last August, sitting at 147,000 units. Most of the increase was in the West, where material and labor shortages have been particularly troublesome.”

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.