Housing Starts at a Gallop in August, Returning to Fastest Pace of Year - 9/27/2004 - Mortgage Loan Refinance Debt Equity

Housing Starts at a Gallop in August, Returning to the Fastest Pace of the Year

Last month’s home building matched the pace set in March, which was the highest level of the year, and was 0.6% higher than July’s upwardly revised rate of 1.988 million.

There were 10.4% more housing starts during the first eight months of this year than for the same period of 2003.

“Builders remain confident about the market and are keeping up with strong demand for single-family homes and condominiums,” said NAHB President Bobby Rayburn. “However, builders are managing their production schedules carefully and cutting back slightly on the number of new building permits.”

Issuance of total building permits decreased 5.5% from the upwardly revised July pace to a seasonably adjusted rate of 1.952 million units. However, permits were up 10% on a year-to-date basis.

“The housing market recently has been buoyed by a healthy combination of strong demographics, improving employment and income growth and a downshift in long-term interest rates,” said NAHB Chief Economist David Seiders. “Naysayers talking about a housing bubble should look at the fundamentals that are in place and see that the national housing market is extremely sound.”

August’s housing starts were widely viewed as another encouraging sign that economic growth is returning to more vigorous levels following a slowdown this summer that the Federal Reserve has largely attributed to high oil prices.

Single-family housing starts in August increased 0.4% to a pace of 1.667 million, which was 11.6% higher than the same month a year earlier. Multifamily housing starts increased to a seasonally adjusted rate of 333,000 units, 1.5% above the July pace, but 2.3% below a year earlier.

“Starts are likely to slip a bit in the fourth quarter as interest rates firm up, but it’s now clear that single-family home production will hit a new annual record in 2004,” Seiders added.

Construction of new homes and apartments in August increased across all regions but the West, where they declined 4.7% following a strong surge during the previous month. Starts were up 6.5% in the Northeast, 4.8% in the Midwest and 1.0% in the South.

Single-family permit issuance last month decreased by 3.0% and multifamily permits were down 13.8% from the July pace.