New-home construction activity was up in August for the single-family market but down in the multifamily sector, according to data released today by the U.S. Census Bureau. While overall housing permit activity fell 1.0% for the month to an annual rate of 803,000, single-family permits ticked up 0.2% to a rate of 512,000—the highest level seen since March 2010.
Housing starts improved 2.3% to an annual rate of 750,000, thanks to single-family activity, which was up 5.5%.
Multifamily permit activity fell 3.0% on a monthly basis; however, the drop came on the heels of an 11.2% jump the previous month. Multifamily starts were down 4.9%.
"The recovery is proving to be a slow one," said Patrick Newport, U.S. economist at IHS Global Insight. "In a nutshell, this report reinforces what the Fed and Ben Berman said last week—that the housing market is improving but depressed and that housing remains the missing piston in the engine."
Why that piston has yet to kick into gear remains a bit of a mystery, Newport said on a call with Builder today. "Starts really aren’t picking up in any state except North Dakota. The fact that the inactivity is so consistent points to a lack of credit availability for both builders and buyers, but mostly for builders right now."
Starts have been down for so long while population has been growing, eventually they will have to come back, barring any major wrenches being thrown into the economic recovery, he says. Still, he warns, "we are expecting this slow pace to continue for another year."
Claire Ashley is a senior editor at Builder.