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U.S. housing starts fall in August as multifamily projects stall

Single-family starts rose 7.6% to 918,000 units, while multifamily starts dropped 22.5% to 344,000 units, according to First American data.

Reported · Written up by our desk · Residential

U.S. housing starts declined in August, easing 2.6% month over month to a seasonally adjusted annual rate of 1.3 million units, as developers moved more cautiously through their construction pipelines, according to data cited by Commercial Observer from First American Financial Corporation.

Single-family starts increased 7.6% in August to 918,000 units, but multifamily starts, defined as projects with five or more units, fell 22.5% month over month to 344,000 units.

Commercial Observer also noted that the gap between single-family and multifamily activity comes as affordability remains a headwind, with First American pointing to conditions including a 30-year mortgage rate that has jumped above 7%.

First American chief economist Mark Fleming said single-family construction showed some improvement, but builders are not accelerating production because new-home inventory remains elevated and incentives are doing more of the work to drive sales. Fleming added that one month of data does not change the broader picture, with builders managing permits and production as months’ supply of new homes stays high and permit growth has slowed.

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