Housing activity – starts and permits – posted strong results in September as the single-family segment made gains across most of the country while multifamily housing appears to be trending flat. Total housing starts rose to a 1.415 million annual rate from a 1.388 million pace in August, a 1.9% increase. The September gain is the fourth rise in the last five months since hitting an April low.
The dominant single-family segment, which accounts for almost 80% of new home construction, rose 8.5% for the month to a rate of 1.108 million. Starts of multifamily structures with five or more units tumbled 14.7% to 295,000. From a year ago, total starts are up 11.1% with single-family starts up 22.3% and multifamily starts down 17.4%.
Among the regions in the report, total starts rose in three of the four regions. The Northeast led the gainers with a 66.7% surge while the South, the largest region by volume, rose 6.2%, and the West gained 1.4% for the month. The Midwest fell 32.7%. For the single-family segment, the Northeast again led with a 20.7% rise while the South increased 17.7% and the West added 1.6% for the month. The Midwest had a 16.4% drop.
For housing permits, total permits jumped 5.2% to 1.553 million from 1.476 million in August. Total permits are 8.1% above the September 2019 level. Single-family permits were up 7.8% at 1.119 million, the highest rate since March 2007, while permits for two- to four-family units fell 15.4% and permits for five or more units increased 1.0% to 390,000. Combined multifamily permits were 434,000, down 0.9% for the month and 19.2% from a year ago. Overall, single-family permits are showing persistent strength since the April low while multifamily permits are essentially trending sideways (see first chart).