(Bloomberg) -- U.S. new-home construction fell in September on a
decline in the South that may reflect disruptions from Hurricane
Florence, government figures showed Wednesday.
Highlights of Housing Starts (September)
- Residential starts dropped 5.3% to 1.201m annualized rate (est. 1.21m) after downwardly revised 1.268m pace in prior month
- Multifamily home starts fell 15.2%; single-family declined 0.9%
- Permits, a proxy for future construction of all types of homes, slipped 0.6% to 1.241m rate (est. 1.275m) after 1.249m pace; reflects decline in multifamily permits
Key Takeaways
Analysts had forecast a decline in housing starts after
Hurricane Florence, which made landfall in North Carolina on
Sept. 14, caused damage and flooding throughout the Carolinas.
Those states are part of the report's South region, which
accounts for about half of starts and showed a 13.7 percent drop
from the prior month. Hurricane Michael, which struck Florida
and other southeastern states last week, will probably affect
activity in October.
While the impact of the storms on housing data is likely to be
temporary, the decline in starts largely reflected slower
construction in multifamily housing, a category that tends to be
volatile. In addition, permits for single-family homes rose 2.9
percent last month, the most in a year, on gains in the
Northeast and West, indicating builders have a steady pipeline
of construction.
That indicates housing could contribute to the economy toward
the end of the year as consumer demand, helped by a solid job
market, lower taxes and post-storm rebuilding, overshadows
headwinds including rising mortgage rates and property prices.
A decline in lumber prices from a record earlier this year may
also be providing some comfort to developers. A gauge of
homebuilders’ confidence rose in October for the first time in
five months, according to a National Association of Home
Builders/Wells Fargo report released Tuesday.
Other Details
- Single-family home starts fell to a 871,000 rate from 879,000 the prior month
- Groundbreaking on multifamily homes, such as apartment buildings and condominiums, dropped to an annual rate of 330,000
- Midwest region also posted a decline in starts, while they rose in Northeast and West to highest levels since March
- Report shows wide margin of error, with a 90 percent chance that the September figure on housing starts ranged from a 16.6 percent drop to a 6 percent gain
- Report released jointly by the Census Bureau and Department of Housing and Urban Development in Washington
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