The extent of Hurricane Florence’s impact is widening, with construction falling 13.7 percent month-over-month in the South.
At a 5.3 percent decline from the last month, September starts underwhelmed, according to the Commerce Department. Combined, housing starts totaled 1.2 million, with 324,000 multifamily (five units or more) starts and 871,000 single-family starts.
On an annual basis, ground-breaking increased 3.7 percent.
Approvals for builds decreased 0.6 percent to 1.24 million permits, but approvals for single-family starts were up 2.9 percent to 851,000. Approvals for multifamily came in at 351,000.
Completions followed suit, down 4.1 percent to 1.16 million. Completions in the single-family space slumped 8.7 percent, to 844,000, and completions on multifamily totaled 312,000.
“The most obvious culprit for soft residential construction data is the string of major storms that have hit the Mid- and South-Atlantic in recent weeks,” said Aaron Terrazas, senior economist at Zillow, in a statement. “The region—which bore the brunt of the destruction wrought by Hurricanes Florence and Michael—accounts for roughly one in eight new homes built nationwide, making an outsized contribution to residential construction compared to its population. It’s likely that construction activity in the Southeast will continue to be muted in October as the area struggles to recover, but should rebound over the winter as the region repairs and rebuilds.”
“Housing starts are in line with builder sentiment, which shows that builders are overall confident in the housing market but continue to face supply-side challenges,” says Randy Noel, chairman of the National Association of Home Builders (NAHB), in an NAHB Now update. “Though lumber prices have declined recently, builders remain concerned about labor shortages, especially as the number of unfilled construction jobs has reached a post-recession high.”
“This report is consistent with our forecast for gradual strengthening in the single-family sector of the housing market following the summer soft patch,” said Robert Dietz, chief economist at the NAHB. “A growing economy, coupled with positive demographics for housing, should keep the market moving forward at a modest pace in the months ahead.”
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