Single-family housing starts increased in September 2015, while authorizations and housing competitions decreased, according to new residential construction statistics from the U.S. Census Bureau and HUD released Tuesday.
The report showed that in September, single-family housing starts reached a rate of 740,000, up 0.3 percent from the revised August figure of 738,000. For units in buildings with five units or more, the September rate was 454,000.
David Crowe, chief economist of the National Association of Home Builders (NAHB) noted that the rise in starts "provide a clearer picture of the steady increase in housing construction that we have been experiencing for several years."
National Association of Federal Credit Unions Chief Economist Curt Long said that the housing starts is "encouraging, but reconfirms that much of the recent strength in the market is focused in the multifamily segment." "This speaks to the inability of many potential borrowers to afford to purchase housing due to high prices, steep down payment requirements and tight inventory."
Single-family authorizations were at a rate of 697,000, down 0.3 percent from the revised August figure of 699,000. Authorizations of units in buildings with five units or more were at a rate of 369,000 in September, according to the Bureau and HUD.
Housing completions in the single-family market were at a rate of 643,000 in September, 1.8 percent below the revised August rate of 655,000, the report explained. The September rate for units in buildings with five units or more was 378,000.
"The smoothed trends tell the same story: single-family production continues to move forward at a modest pace as more current home owners feel comfortable selling their existing home and buying a new one," - David Crowe
He added, "Younger, newly formed households continue to move out of their parents or roommate living arrangements and rent an apartment driving up the demand for more rental units. NAHB expects this same trend to continue into 2016."
Homebuilders' confidence in the market for newly constructed single-family homes rose in October, returning to a level not seen since the end of the housing boom in 2005.
NAHB Chairman and a home builder from Blue Springs, Missouri Tom Woods noted that the single-family housing market is "making lasting gains as more serious buyers come forward" as builder confidence has floated above the 60s since June. "However, our members continue to tell us there are still pockets of softness in some markets across the nation, and that they face challenges regarding the availability of lots and labor."
“With October’s three-point uptick, builder confidence has been holding steady or increasing for five straight months, " said David Crowe, NAHB chief economist. "This upward momentum shows that our industry is strengthening at a gradual but consistent pace. With firm job creation, economic growth and the release of pent-up demand, we expect housing to keep moving forward as we start to close out 2015."