Driven by a 4.4% gain in single-family properties, housing starts rose 0.3% to a seasonally adjusted annual rate of 610,000 units in September, the U.S. Commerce Department reports. Analysts expected housing starts to decline modestly following a large gain in August.
‘Builders are cautiously responding to the small improvement they are seeing in interest among potential home buyers,’ says Bob Jones, chairman of the National Association of Home Builders (NAHB).
The entire increase in housing production in September was due to improvement on the single-family side, which rose to a seasonally adjusted annual rate of 452,000 units – the strongest level since May. Multifamily starts, which NAHB notes tend to exhibit greater volatility on a month-to-month basis, recorded a 9.7% decline to a 158,000-unit rate from August.
On Monday, the NAHB reported that builder confidence for newly built, single-family homes improved for the first time in months, rising three points to 16 – a level last seen in June 2009.
‘While challenges such as competition from foreclosures, inaccurate appraisal values, and general consumer uncertainty about the economy and job market continue to be major factors, builders have seen a slight increase in consumers who are considering a home purchase,’ says NAHB chief economist David Crowe.
Jones and Crowe categorize home builders' biggest hurdles as financing-related: tougher mortgage requirements for home buyers and scarce construction credit for builders.
SOURCE: National Association of Home Builders