Home construction saw a better-than-expected rebound in August after a contraction a month earlier, although the strength was on the back of sharp gains in apartment building, while the single-family home sector saw a decline.
After a revised 6.2 percent decline in July, housing in the United States rose 3.9 percent in August to a seasonally adjusted annual rate of 1.615 million units, according to the Commerce Department’s September 21 report (PDF). Economists polled by Reuters expect an August rebound in housing to start at 1.555 million units.
Multi-family launches rose 21.6 percent in the month to 530,000 units in August. Single-family starts, however, declined for the third straight month in August, falling 2.8 percent in the month to 1.076 million units.
Building permits – a key indicator for future construction – climbed 6.0 percent to 1.728 million in August, the highest number since April 2021. The gains were mostly concentrated in the multi-family home segment, which saw a 19.7 per cent increase in permits over the month, while single family house construction permits grew just 0.6 per cent.
“We anticipate that this strength in multi-family rentals may be a response to strong growth in demand and lower vacancy rates in rental units,” said Conrad Dequadros, senior economic advisor at Brain Capital in New York.
Construction activity was brisk in all parts of the country except the West, which saw an overall decline of 21.1 percent, led by a 20.5 percent drop in single-family homes. While overall construction in the Midwest increased by 11.4 percent, single-family home construction in the region contracted by 12.5 percent.
The Commerce Department report also showed that the number of homes authorized for construction but not yet started in August rose 3.7 percent monthly to one of the highest readings on record, suggesting that builders start new projects. were hesitant to do so.
Homebuilder confidence rose in September after falling to its lowest level in 13 months in August, according to the NAHB/Wells Fargo Housing Market Index (HMI), although hiring difficulties and building materials supply chain issues shadowed optimism. happened.
“September figures show stability as some building material cost challenges remain low, especially for softwood lumber,” NAHB President Chuck Fowke said in a statement. “However, delivery times are extended and chronic construction labor shortages are expected to continue as the overall labor market improves.”
Job openings in the United States hit a record high of more than 10 million on the last day of July, while the number declined by more than 4 million, suggesting the economic recovery was being held back as businesses lay vacant. Struggling to fill positions.
According to the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS), construction hiring increased from 371,000 in June to 384,000 in July, while 321,000 were incomplete in construction.
“While building materials challenges remain, the rate of cost growth has slowed for some products, but the rate of job openings in construction continues to be high,” Robert Dietz, chief economist at NAHB, said in a statement.
Reuters contributed to this report.
This News Originally From – The Epoch Times