Single-Family Housing Starts Edge Higher in August

Laura Kusisto and Ben Leubsdorf reported this week at The Wall Street Journal Online that, “U.S. single-family housing starts continued to edge higher in August, in what could be the last snapshot of the market’s health before the cleanup from major hurricanes begins to skew construction activity.

Overall housing starts slipped 0.8% in August from the prior month to a seasonally adjusted annual rate of 1.18 million, driven by continued steep declines in multifamily building, the Commerce Department said Tuesday.

Single-family starts, however, rose 1.6% in August, even as starts for buildings with two or more units and fell 6.5%.”

The Journal writers explained that, “The report offers a mixed picture of a market in which single-family construction is gradually improving while multifamily construction is declining significantly due to an oversupply of apartments in many urban markets.”

“U.S. Housing Starts Fell, Permits Rose in August–Limited supply, fast-rising prices pressured would-be home buyers this year.” The Wall Street Journal Online (September 19, 2017).

The Journal article added that, “U.S. median household income, adjusted for inflation, rose to a new record in 2016, surpassing the previous peak in 1999, the Census Bureau reported last week, as Americans enjoy a period of sustained income growth and economic prosperity.

Despite those gains, new construction remains weak due to a shortage of labor, lack of available land and other factors.

“‘Almost every other item of investment, everything is up and recovered, but housing construction has not recovered,’ said Chris Rupkey, chief financial economist at MUFG Union Bank. ‘It’s the missing piece of the puzzle.'”

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