Building begins on more new homes
Groundbreaking for new homes increased in August for the fourth straight month, another sign the housing market’s worst days have passed.
Driven by construction of apartments, U.S. housing starts in August were up 1.5% from July, the U.S. Census Bureau reported Thursday.
Construction starts for projects with five or more units were up 35.3%. Starts for single-family houses, though, were down 3%.
The uptick in housing starts might signal a bottom in the home-building industry, but a return to peak construction levels probably is a long way off.
“We still have about 800,000 too many homes out there,” said economist Patrick Newport of the consulting firm IHS Global Insight, referring to the vast supply of unsold new buildings. “We need to get rid of that excess” before home construction returns to historical norms, he said.
The seasonally adjusted annual rate of housing starts in August of 598,000 units was still 29.6% below the same month a year earlier -- and 2008 was by far the worst year for housing starts since the federal government began tracking the data in 1959.
The level of housing starts so far this year is on course to fall below last year’s total of 950,500 units; 2008 marked the first time in the 40-year history of the data that housing starts were below 1 million.
The year-to-date rate of housing starts in August was 379,800 units, down 44% from 678,200 a year earlier.
August’s bump in housing starts was fueled by the Northeast, which had a 23.8% increase compared with July. In the West, housing starts for August were unchanged from July. Housing starts in the Midwest were up 0.9%, while starts in the South were down 2.4%.
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