MW: Housing starts tumble 9% as sturdy recovery remains elusive
Builders broke ground on the fewest new homes in a year and a half in September, another setback as the housing market struggles for sustainable momentum.
Housing starts ran at an annual 1.047 million pace, the Labor Department said Wednesday. That was 9% lower than in August and 11.9% lower than a year ago. It was the slowest pace of starts since March 2015. Economists surveyed by MarketWatch had forecast a 1.18 million pace.
The stumble in starts was slightly offset by a surge in building permits, which foreshadows a stronger pace of construction in the future. Permits were at a 1.23 million pace in August, a 6.3% monthly gain and the highest since November.
And single-family housing starts jumped 8.1% to an annual 783,000 pace, the highest in seven months. As builders shift their focus to single-family construction away from apartments, it signals more confidence in the market for owner-occupied homes and generates more economic activity. The U.S. now has the most single-family homes under construction since October 2008.
The Labor Department’s figures are notoriously volatile and often revised heavily. August housing starts and permits, both initially reported as 1.14 million, were each revised up slightly to a 1.15 million rate.
Starts touched the second-highest of the economic cycle in July, so many analysts expected builders to ease back in August. But the pace of construction since the recession is still well below that of earlier periods.