October 18, 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 September came in at an annualized rate of 1.127 million, below expectations of an annualized rate of 1.170 million and below August’s rate of 1.180 million. Single-family starts are down 4.6% in September while single-family completions were up 4.6%. Multi-family starts also fell 5.1% to 298,000. Permits for single-family homes rose 2.4% while multi-family units fell 16.1% in September.
The hurricanes that hit the southern states is reflected in this housing starts report. The South experienced a 9.3% decline in housing starts. Permits also struggled in the South undergoing a 5.6% decline. The Southern states were not the only ones to struggle with starting houses. The Northeast and Midwest regions also declined 9.2% and 20.2% respectively. However the West helped offset the sharp drops in the other regions with an increase in starts of 15.7%. With housing permits falling in 3 out of the 4 regions, this will negatively affect housing starts in the months to come.