Construction on New Homes Slows as Supply-Chain Woes Hit the Housing Market

U.S. home builders started construction on homes at a seasonally-adjusted annual rate of 1.56 million in September, representing a 1.6% decrease from the previous month, the U.S. Census Bureau reported Tuesday. Compared with September 2020, housing starts were up 7.4%. The pace of permitting for new housing units also dropped in September. Permitting for new homes occurred at a seasonally-adjusted annual rate of 1.59 million, down 7.7% from August, in line with the rate of permitting from a year ago. Economists polled by MarketWatch had expected housing starts to occur at a pace of 1.61 million and building permits to come in at a pace of 1.67 million. What happened The drop in permits was driven mainly by a decrease in multifamily housing units, though fewer single-family homes were permitted as well. Multifamily permits fell 21% on a monthly basis, while single-family permits decreased nearly 1%. The number of permits issued in September was the lowest it has been since a year ago, and all regions saw a downturn in permitting activity except for the Midwest. Notably, there was a 22% increase in permits for buildings with between two and four housing units, such as duplexes and triplexes. New construction on multifamily buildings also decreased in September, with a 5% downturn, though single-family starts remained unchanged from the previous month. It was the slowest pace for housing starts since April, driven by downturns in the Northeast and South. SOURCE: Article Written by Jacob Passy (OCT 19, 2021)