"Builders also sought out fewer permits in August, with the seasonally adjusted annual rate falling to 1.312 million, down 3.7% from July and 11.1% annually. Both single family (856,000 units) and multi-family (403,000 units), reported declines, including 11.5% and 10.5% annual declines, respectively. Building permits are now at the lowest level since May 2020, during the height of the pandemic. To meet demand, the nation needs around 2 million new homes a year. Right now, building permits are an anemic 1.3 million, Heather Long, the chief economist at Navy Federal Credit Union, said in a statement."
"While none of this is good news for builders, for consumers in the market for a newly built single-family home, things are looking promising as the number of single-family home completions was up 6.7% month over month and 5.6% year over year to a seasonally adjusted annual rate of 1.09 million. In total, completions were at a rate of 1.608 million units in August, up 8.4% from July, but down 8.4% from a year ago, thanks to a 28.7% annual decline in multi-family completions, which came in at a rate of 503,000 units."
"Builders are holding back as the inventory of new homes for sale keeps growing and new home prices are stagnating, reflecting slower demand, Lisa Sturtevant, the chief economist at Bright MLS, said in a statement. A pullback in residential building activity has historically preceded an economic recession. Residential real estate is a key component of the U.S. economy, accounting for about 15-18% of Gross Domestic Product. When home building slows, it has a ripple effect across the economy. Declining new construction also reflects less consumer demand and indicates that overall consumer spending could be waning."
Building permits fell to a seasonally adjusted annual rate of 1.312 million in August, down 3.7% from July and 11.1% year over year, with single-family permits at 856,000 and multi-family at 403,000. Permits are at their lowest level since May 2020, while the nation needs roughly 2 million new homes annually to meet demand. Single-family completions increased 6.7% month over month and 5.6% year over year to a 1.09 million rate. Total completions were 1.608 million in August, up monthly but down annually due to a 28.7% drop in multi-family completions to 503,000. Builders are holding back as inventories grow and prices stagnate, and reduced residential construction can ripple through the economy given housing’s 15–18% share of GDP. Regionally, starts rose in the Northeast and West, with Midwest and South levels reported as 220,000 and 667,000 units respectively.
Read at www.housingwire.com
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