New Home Construction Trending Higher

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Housing starts measure the number of new homes that began construction in any given month. The data, collected by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, is compiled monthly, along with the number of building permits that were authorized during the month. In August, housing starts fell 14.4 percent. The numbers, at a glance, seem to indicate a setback for the new home market. However, the drop was largely fueled by a decline in the number of apartment buildings and condominiums that began construction, rather than single-family homes. Single-family housing starts, on the other hand, were just 2.4 percent below July’s upwardly revised estimate. And, total housing starts, despite a significant drop, are still 8 percent above last year’s rate. This indicates that the market is trending in the right direction. In fact,single-family building permits – which are a good indicator of future new home construction – were relatively flat in August, falling just 0.8 percent. Overall, building permits for new housing units were up 5.3 percent over last year’s estimates. More here.