WASHINGTON, DC—Forward-looking housing numbers released Wednesday and Thursday made a more positive impression than those reflecting the previous month. Federal government figures released Thursday showed that although housing starts declined in August from the previous month, building permits were up, especially on a year-over-year basis. That dovetails with the increase in builder confidence reported Wednesday by the National Association of Home Builders.
Both single-family and multifamily starts were off 3% to an annualized pace of 1,126,000 units in August, according to data jointly released by the Census Bureau and the Department of Housing and Urban Development. However, the August figures represented a 16.6% Y-O-Y gain.
Similarly, housing completions came in 6.1% below the revised July annualized figure of 996,000 units, but represented a 3.3% Y-O-Y increase overall. Here, however, the Y-O-Y gains were skewed toward single-family construction; multifamily completions were off about 3.2% from a year ago to an annualized 283,000 units.
Looking at permits, August saw a 3.5% increase over July and a 12.5% Y-O-Y gain. For apartment units—that is, permits issued for construction of five or more units—the Y-O-Y gain was even more pronounced at 21.5%, and the number of multifamily units under construction as of August 31 was also up Y-O-Y, by 18.9%, reachingwhat Bloomberg Business called the highest number since December 1974. Conversely, permits for two- to four-family construction were off 11.4% from August 2014.
NAHB said Wednesday that builder confidence in the market for newly constructed single-family homes rose one point to a level of 62 in the latest National Association of Home Builders/Wells Fargo Housing Market Index. It represents the highest reading since October 2005.
Two of the three HMI components posted gains in September. The index measuring buyer traffic increased two points to 47, and the component gauging current sales conditions rose one point to 67. However, the index charting sales expectations in the next six months dropped from 70 to 68.
“NAHB is projecting about 1.1 million total housing starts this year,” says NAHB chief economist David Crowe. Figures from the latest HMI, he adds, are “consistent with our forecast, and barring any unexpected jolts, we expect housing to keep moving forward at a steady, modest rate through the end of the year.” The association expects an annualized pace of 1.3 million total housing starts in 2016.