Housing construction picked up in September, buoyed by a surge in apartment-building.
Housing starts increased 6.3% from August, according to new figures from the Census Bureau, a pace a bit faster than analysts expected. That figure was driven by a 18.5% jump in starts for buildings with five or more units. Building permits — an indicator of future construction — were up 1.5% on the month.
Home builders say they're seeing increased demand as interest rates remain low and the economy gradually improves. Meanwhile, multifamily developers have been pushing to keep up with high demand for apartments as more households rent and more young adults are moving out on their own.
Year to date, apartment construction is up 22.7%, and completions of buildings with five or more units is up 43%. However, the new supply is having relatively little impact on rents, market-watchers say, as demand is growing nearly as fast.
September's growth was fastest in the West and the South.