Housing starts in the US fell in September, reports said. (Photo: Sean O’Flaherty, Wikimedia Commons)
While housing starts in the US fell to a one-and-a-half year low in September on significant declines in multi-family home building, a hike in the construction of single-family homes resulted in sustained strength within the housing market, reported Reuters.
According to the Commerce Department, groundbreaking fell nine percent to a seasonally adjusted rate of 1.05 million units, or its lowest since March 2015. August’s housing starts were revised from the previously reported rate of 1.14 million units to a 1.15 million-unit pace.
Multi-family starts declined 38 percent to a 264,000-unit rate last month. September’s drop was deemed to be temporary as rents increased to their fastest rate in a decade.
Meanwhile, single-family housing starts, which accounts for the biggest share of the housing market, rose 8.1 percent to a 783,000-unit rate in September – its highest since February.
Economists had expected housing starts for September to increase to a rate of 1.18 million units. The drop in September brought overall housing starts for the third quarter way below their average for the second quarter.
This indicates that residential construction continued to be a drag on economic growth during the third quarter after deductions from the April to June output.
Nonetheless, overall home building activity is expected to rebound over the coming months, given the 6.3 percent hike in future construction permits in September. Multi-family permits jumped 16.8 percent last month, while permits for single-family homes climbed 0.4 percent.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
