Building permit authorizations, an indicator of future construction activity, rebounded in August, increasing 5.7% from July’s downward-revised rate of 1.23 million to 1.3 million for the month. Permits are 8.3% ahead of the year-ago mark.
Single-family starts were up 1.6% in August to 851,000 from July’s downward-revised rate of 838,000, and they were 17.1% ahead of the year-ago mark. Multifamily starts dropped 5.8% from July’s upward-revised rate of 343,000 to 323,000 starts in August. Multifamily starts were down 23.1% year-over-year.
August’s starts report aligns with analyst predictions, according to MarketWatch. The impact of Hurricanes Harvey and Irma is likely to show itself in increased new construction activity in the coming months and years, though the ongoing short-term remediation and recovery efforts could stress regional and even national supplies of labor and materials.
Those supply-side challenges continue to be a drag on homebuilder confidence in the new, single-family construction market. Monday’s reportfrom the National Association of Home Builders and Wells Fargo tracking the measure saw builder optimism wane in September due to questions over the availability of labor and materials nationwide as the Gulf Coast and Southeast begin to rebuild following Harvey and Irma.
A second-straight month of declines in the multifamily sector shows that the category is continuing to slow as the housing market recovers. That activity is shifting to the single-family side of the market as more households opt to purchase a home or rent one in a community in which they would eventually like to buy.
A slight decrease in single-family permit authorizations could indicate slowed growth down the road, though the measure is still ahead of of the year-ago mark. An uptick in multifamily permit authorizations, meanwhile, shows that sector is likely to show volatility even as it tapers off.