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Is the go-go U.S. housing construction market finally taking a breather?
It certainly seems that way—at least according to statistics on new residential construction released on Thursday by the Commerce Department, which confirm a slowdown in housing starts after a fast-paced 2015.
Starts on single-family homes—nearly two-thirds of those on the market—dropped to 739,000, while multifamily units like apartments and condominiums dropped to 387,000.
The bright side: The pace of starts is still nothing to sneeze at. Year over year, it’s actually up 17%, said our chief economist, Jonathan Smoke. And single-family starts are up 15%. Meanwhile, Smoke cautioned against placing too much of an emphasis on the new numbers.
“These measures are based on a survey of local jurisdictions and have been prone to wide fluctuations month to month ever since the downturn began,” he said.
Both home prices and rents are rising at well above normal levels, Smoke added, “and that market signal is exactly what builders and developers need to find confidence to start new construction again.”
In fact, builders are getting more confident all the time. The National Association of Home Builders reported on Wednesday that its confidence index rose in September to 62, the highest level since the precrash era in November 2005.
Take that to heart, home-buying hopefuls, and enjoy this tidbit of happy data: New applications for permits were up 3.5%, to 1.17 million, and the rise was both for multi- and single-family construction. More new homes are, in fact, on the horizon.
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