New-home construction posts biggest increase in 6 months

By Aarthi Swaminathan

Housing starts post bigger-than-expected increase in August

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The numbers: Construction of new homes rose 9.6% in August as builders ramped up new projects.

Housing starts rose to a 1.36 million annual pace from 1.24 million in July, the government said Wednesday.

That's how many houses would be built over an entire year if construction took place at the same rate in every month as it did in August.

The data exceeded what Wall Street was expecting, which was a 1.31 million pace. All numbers are seasonally adjusted.

Housing starts posted the biggest increase since February, but the construction of new homes is still trending at lower levels.

Builders in August were still dealing with elevated financing costs to build, though falling mortgage rates may have boosted demand for newly built homes.

New-home construction is up 3.9% from a year ago.

Single-family construction surged in August, while multi-family construction fell.

Building permits, a sign of future construction, rose 4.9% to a 1.48 million rate.

Key details: Builders sharply pulled back construction of new apartment buildings, but pumped the brakes on single-family homes.

Single-family starts surged by 15.8% in August, while apartment starts fell by 6.7%.

Builders' pace of construction was up across most of the U.S. Construction of homes rose double digits in the Midwest and the South, with a modest increase in the West. Only the Northeast saw housing starts fall, down 27.3% in August.

Permits for single-family homes rose by 2.8%, and multi-family by 8.4%. Notably, permits applied by builders to construct middle housing such as townhomes, with 2 to 4 units, rose by 16.3% in August.

-Aarthi Swaminathan

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09-18-24 0850ET

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