There’s good news on the construction front as builders have been stepping up their efforts to build more homes and replenish inventory-starved markets.
According to the Commerce Department’s latest figures for August, housing starts climbed by 9.2 percent in that month, hitting a seasonally-adjusted annual rate of 1.28 million units.
Breaking down the numbers, the Commerce Department said single-family home starts rose by 1.9 percent to 876,000 units. Meanwhile, multifamily homes, which includes apartments and condominiums, saw starts rise by a massive 29.3 percent to 408,000 units.
However, Robert Dietz, chief economist of the National Association of Home Builders, warned that the increased construction was likely just temporary, and will slow down throughout the remainder of the year.
“Affordability is a particular concern because of home price gains, due in part to the high regulatory burden on new-home construction,” Dietz said. “Increasing costs for building materials prompted partially by recent imposed tariffs on a wide range of products are also a concern. Moreover, interest rates are continuing their gradual upward climb.”
As evidence of this, the Commerce Department said that housing permits, which are used as a gauge of future construction, fell by 5.7 percent to 1.23 million in August. Single-family home permits fell by 6.1 percent to 820,000 units, while multifamily permits declined by 4.9 percent to 409,000.
Regionally, the West saw the biggest increase in homebuilding last month, up 19.1 percent month-over-month in combined single-family and multifamily housing starts. Housing starts also rose 9.1 percent month-over-month in the Midwest and by 6.5 percent in the South. The Northeast remained unchanged.