Wet Weather Slows Home Starts But Production Headed for a Record - 10/25/2004 - Mortgage Loan Refinance Debt Equity

Wet Weather Slows Home Starts in September, But Production Headed for a Record

The U.S. Commerce Department reported that housing starts declined 6% from the best monthly pace of the year in August to a still-solid rate of 1.9 million units on a seasonally adjusted annual basis in September.

Meanwhile, issuance of new permits, which can provide an indication of future building activity, rose 1.8% last month to a rate of more than 2 million units, and the number of permits that had been issued but not yet used rose to the highest level since the 1970s.

“Builders would have started more homes last month, but just took a rain check in a lot of cases,” said NAHB President Bobby Rayburn. “In fact, given all the weather-related issues in September, today’s report is pretty encouraging. We’re in good shape heading into the fourth quarter.”

The decline in housing starts was largely attributable to a 27% slump in the storm-weary Northeast, where lingering precipitation saturated many building sites. Starts were down 8% in the West, 4.6% in the Midwest and 1% in the South, a region where many states were unaffected by the hurricanes that battered Florida.

Single-family starts in September fell 8.2%, but multifamily activity rose 4.7%.

Building permits for single-family homes last month held firm at August’s impressive level, and permits for multifamily units were up 8.2%.

Permits were up in every region of the country except the West, which experienced a marginal 1.3% decline.

“In terms of our housing forecast, today’s report is right on the money,” said NAHB Chief Economist David Seiders. “Every single region was up for the third quarter, and it’s now clear that housing continued to contribute to economic growth in that period. There’s also little doubt that we’re looking at another record year for single-family home building in 2004 — up about 6% from last year’s record, to 1.6 million units.”