September 19, 2017 – Housing starts track the number of new residential construction projects underway over the course of a month. This indicator has implications for demand in construction spending/jobs, consumer wages, and complimentary sectors such as durable household item sales. Along with building permits, housing starts is considered a leading economic indicator.
Housing starts in August came in at an annualized rate of 1.180 million, above expectations of an annualized rate of 1.173 million and 0.8% below July’s upward revision of 1.190 million. Single-family starts are up 1.6% in August and are up 17.1% year-over-year gain. Multi-family starts fell 6.5% to 329,000. Permits are up 5.7% from last month and are up 8.3% year-over-year.
Hurricane Harvey hitting Texas in the last part of August reflects the housing starts numbers. Starts in the South plummeted 7.9%. The number of homes completed were also affected with a drop of 10.2% overall; with the South alone down 22.2%. The past few hurricanes hitting southern states forced people to stop the construction of homes along with driving people away who planned to build in those states. We will be watching housing starts closely next month after the damage from Hurricane Harvey, Irma and Maria is assessed.