Housing Starts Decline in September

WASHINGTON D.C. - The Commerce Department reported Tuesday that housing starts fell 6 percent last month to an annual rate of 1.898 million from an upwardly revised 2.020 million pace in August.

Single-family starts posted their biggest drop since February 2003, tumbling 8.2 percent, with activity off in all regions of the country.

Home building gained fresh strength in the summer on a decline in mortgage rates that were already not far above 40-year lows. Interest rates on the popular 30-year fixed rate home loan eased to a national average of 5.74 percent last week after a government report showing a weak jobs market raised worries that economic growth is slowing.

The National Association of Home Builders (NAHB) blamed Mother Nature for the drop in housing starts.

?EUR??,,????'??Builders would have started more homes last month, but just took a rain-check in a lot of cases,?EUR??,,????'?? said Bobby Rayburn, president of the NAHB. ?EUR??,,????'??In fact, given all the weather-related issues in September, today's report is pretty encouraging. We're in good shape heading into the fourth quarter.?EUR??,,????'??

The 6 percent drop in nationwide housing starts was largely attributable to a 27 percent decline in the storm-weary Northeast, where lingering precipitation saturated many building sites. Starts also declined 4.6 percent in the Midwest, 8 percent in the West and 1 percent in the South - a region that includes hurricane-battered Florida but also many other less-affected states. On the single-family side, starts fell 8.2 percent, but on the multifamily side they rose 4.7 percent.

Meanwhile, building permits for single-family homes held firm at the previous month's level, and permits for multifamily units gained 8.2 percent. Regionally, every part of the country reported gains in permits except the West, which had a 1.3 percent decline.

?EUR??,,????'??In terms of our housing forecast, today's report is right on the money,?EUR??,,????'?? said NAHB Chief Economist David Seiders. ?EUR??,,????'??Every single region was up for the third quarter, and it's now clear that housing continued to contribute to economic growth in that period. There's also little doubt that we're looking at another record year for single-family home building in 2004 - up about six percent from last year's record, to 1.6 million units.?EUR??,,????'??

Building Permits

Privately owned housing units authorized by building permits in September were at a seasonally adjusted annual rate 2,005,000. This is 1.8 percent above the revised August rate of 1.969 million and is 3.2 percent above the September 2003 estimate of 1.943 million.

Single-family authorizations in September were at a rate of 1.558 million, a 0.1 percent increase over August 2004. Authorizations of units in buildings with five units or more were at a rate of 358,000 in September.

Housing Starts

Privately owned housing starts in September were at a seasonally adjusted rate of 1.898 million. This is 6 percent below the revised August estimate of 2.02 million and is 1.2 percent below the September 2003 rate of 1.922 million. Single-family housing starts in September 2004 were at a rate of 1.54 million; this is 8.2 percent below the August figure of 1.678 million. The September estimate for units in buildings with five units was 328,000.

Housing Completions

Privately owned housing completions in September were at a seasonally adjusted rate of 1.791 million. This is 6.2 percent below the revised August estimate of 1.909 million, but is 5.5 percent above the September 2003 rate of 1.697 million. Single-family housing completions in September 2004 were at a rate of 1.545 million; this is 0.1 percent above the August figure of 1.544 million. The September rate for units in buildings with five units or more was 229,000.