US home construction hits one-year low in September

Construction of new US homes fell to a one-year low in September as hurricane-damaged housing markets struggled to recover from back-to-back hurricanes in August and September, government data showed Wednesday.

However, US regions not affected by Hurricanes Harvey and Irma also saw steep drops in home building.

After nearly a decade of economic recovery, economists say rising wages and steady job creation have created strong demand for homes. But rising input costs and a shortage of workers has kept the market very tight and the housing market was under stress even before the storms.

But analysts said Wednesday the September numbers pointed to a shift away from construction of apartments, as rents cooled in some markets, meaning the situation for the all-important single-family segment was less dire.

Total housing starts fell 4.7 percent in September to a seasonally adjusted annual rate of 1.13 million units, the third straight monthly decline and the lowest pace of construction since September of last year, according to the Commerce Department. Analysts had expected a decline of only 1.9 percent.

The storm-hit southern United States saw a 9.3 percent decline in construction. The midwest fell 20.2 percent and the northeast saw a 9.2 percent drop. The western United States was a bright spot, however, rising 15.7 percent.

Permits for construction, which are a sign of future homebuilding, also fell 4.5 percent for the month to an annual rate of 1.21 million, seasonally adjusted, the slowest pace since May.

In the single-family housing segment, however, construction rose everywhere but in the south.

Single family permits also rose 2.4 percent while multi-family permits plunged 17.4 percent.

Ralph McLaughlin, chief economist at Trulia, said in a research note that "inventory constrained homebuyers should fear not."

Most of the year's pullback had been in the multi-family sector, which primarily served the retail market, according to McLaughlin.

Year to date, he said, multi-family starts were down 9.1 percent over the same period in 2016 while single family starts had risen by the same amount, he added.

"Frustrated homebuyers should rest assured that the pipeline of new single-family inventory remains robust," said McLaughlin.

Source: AFP