September Housing Starts Stumble After Hurricanes

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The U.S. Census Bureau and the Department of Housing and Urban Development reported Wednesday morning that new housing starts in September fell to a seasonally adjusted annual rate of 1.127 million, a decrease of 4.7% from the upwardly revised August rate of 1.183 million and an increase of 6.1% compared with the September 2016 rate of 1.062 million. The consensus estimate from a survey of economists expected a rate of around 1.17 million.

The revision to the July rate added 3,000 new housing starts from the previously reported total. The seasonally adjusted rate of new building permits fell to 1.215 million, down 4.5% from the upwardly revised August rate of 1.272 million and down 4.3% from the September 2016 rate of 1.27 million. The consensus estimate called for 1.238 million new building permits.

Single-family housing starts also fell in September to an annualized rate of 829,000, down 4.6% from the revised August rate of 869,000. Single-family starts rose by 5.9% year over year in September.

Permits for new single-family homes rose month over month in September from a revised annual rate of 800,000 in August to a seasonally adjusted annual rate of 819,000. The rate rose 9.3% year over year.

Multifamily starts for buildings with five or more units increased by 7.9% year over year in September and dropped by 6.2% compared with August. This number is more volatile than the single-family number and has moved mostly sideways since 2013.

Housing starts were particularly hard hit in the South. Single-family starts fell by 15.3% sequentially and 5.6% year over year. The impact of hurricanes Harvey and Irma gets the blame for the decline.