Hurricanes Hurt Homebuilding in the South

Commerce reports total housing starts slid 4.7 percent from August to a seasonally adjusted annual rate of 1,127,000. Single-family starts fell 4.6 percent to a rate of 819,000, and housing with five units or more dropped 6.2 percent to a SAAR of 286,000.

Regionally, total starts slipped 9.2 percent in the Northeast, 9.3 percent in the South, and plunged 20.2 percent in the Midwest. The West was the only region to show growth with an increase of 15.7 percent. Starts of single-family homes rose in three of the four regions, while plummeting 15.3 percent in the South.

“Looking at historical data, there is a pattern of decreased production immediately following natural disasters, but economic fundamentals will drive the longer-term trend in housing starts,” said NAHB Senior Economist Michael Neal. “Nationwide, single-family permits are up this month, and year-to-date single-family starts are 9.1 percent ahead of their level over the same period last year — two indicators that this sector continues to improve.”

September permit authorizations fell 4.5 percent from August and 4.3 percent from September 2016. The September seasonally adjusted annual rate was 1,215,000. Single-family permit authorizations were up 2.4 percent, while permits for housing of five units or more plummeted 17.4 percent.

The declines were led by the South, down 5.6 percent, and the West, down 9.2 percent.  Total permit authorizations in the Midwest rose 0.5 percent; permits for single-family jumped 7.9 percent. Authorizations in the Northeast rose 9.2 percent on the strength of a 20.7 percent increase in single-family permits.