Privately owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 1,517,000, which is 10% below the revised July rate of 1,685,000 and 14.4% below the August 2021 rate of 1,772,000, according to the U.S. Census Bureau and the Department of Housing and Urban Development.
Single‐family authorizations in August were at a rate of 899,000, or 3.5% below the revised July figure of 932,000. Authorizations of units in buildings with five units or more were at a rate of 571,000.
“The decline in permits suggests continued weak new-home construction for the remainder of the year, which is in line with our expectations,” says Doug Duncan, chief economist at Fannie Mae. “Yesterday’s decline in the National Association of Home Builders’ Housing Market Index also underscores the current pessimism of builders as the sudden rise in mortgage rates has significantly impacted demand for new construction.”
Privately owned housing starts in August were at a seasonally adjusted annual rate of 1,575,000, which is 12.2% above the revised July estimate of 1,404,000 but 0.1% below the August 2021 rate of 1,576,000. Single‐family housing starts in August were at a rate of 935,000, or 3.4% above the revised July figure of 904,000. The August rate for units in buildings with five units or more was 621,000.
August’s housing completions were at a seasonally adjusted annual rate of 1,342,000, which is 5.4% below the revised July estimate of 1,419,000 but 3.1% above the August 2021 rate of 1,302,000. Single‐family housing completions last month were at a rate of 1,017,000, or 0.4% above the revised July rate of 1,013,000. The August rate for units in buildings with five units or more was 318,000.
“The number of single-family completions has modestly outpaced starts for the past three months, suggesting that builders have been able to work through a small amount of their current backlog,” continues Duncan. “We expect that demand for new construction will continue to fall, enabling builders to work through their current backlogs and leading to more completed homes on the market in the coming months.”