Homebuilders See Signs Of Recovery In August

Residential construction rebounded in August, showing signs of recovery after dropping in July, according to a report from the Census Bureau and Department of Housing and Urban Development.

Building permits for privately-owned homes rose to 1,728,000, a 6% jump over July’s 1,630,000 and a 13.5% increase above August 2020’s rate of 1,522,000 permits.

Single-family home permits were authorized at a rate of 1,054,000, also an increase but at a lower margin of 0.6% over July’s figure of 1,048,000.

Housing starts reached a rate of 1,615,000 for private homes – an increase of 3.9% over July’s estimated 1,554,00 and a 17.4% growth over August 2020’s rate of 1,376,000.

However, single-family housing starts in August were down 2.8% to 1,076,000, below July’s 1,107,000 permit authorizations.

Housing completions for privately owned homes were down 4.5% for August to 1,330,000, below July’s estimate of 1,392,000, but up 9.4% from August 2020.

Single-family housing completions were up 2.8% to 971,000 from July’s rate of 945,000.

Buildings with five or more units had completions of 356,000 units.

“The pace of new construction reflected homebuilder shifts toward higher margin projects amid fluctuating costs. As August saw homebuilder sentiment dip over concerns of slipping buyer traffic and sales, builders sought permits for more multifamily projects,” George Ratiu, manager of economic research for Realtor.com, said in an email.

“However, this week’s September sentiment numbers show a rebound is in the works, as residential construction companies work through their order backlog and look forward to increased traffic heading into 2022.”