Single-family housing starts decreased to a seasonally adjusted annual rate of 722,000 in August, according to new residential construction data released by the Commerce Department Tuesday morning. August’s reading marks a significant -6.0% decrease from July’s upwardly-revised rate of 768,000. After three consecutive months of increases, August’s reading is disappointing. More significantly, August marks the first month in 2016 in which the pace of starts fell below the pace of starts seen a year earlier–compared to August 2015, one-unit starts are down -1.2%.
Single-family starts decreased significantly in the Northeast and South in August, dropping -13.8% and -13.1%, respectively, and bringing down total one-unit starts for the month. The Midwest (6.4%) and West (6.3%) posted gains month-over-month, and were the only regions to post an increase in pace year-over-year, with single family starts up 10.5% and 29.2%, respectively.
Total housing permits, the leading indicator for future starts, decreased -0.4% overall in August, due to a hefty -8.4% decrease in permits for multifamily construction with five units or more. Single-family permits increased 3.7% in August, indicating that the pace of starts will likely rebound in September. The Midwest and South posted the biggest gains in permits for one-unit structures, up 8.4% and 3.6%, respectively.
Total privately-owned housing completions dipped -3.4% month-over-month, to a seasonally adjusted annual rate of 1,043,000. The decline is primarily due to a large decline in completions of multifamily structures of 5 units or more, which fell -11.0% from July, but one-unit completions also posted a marginal -0.3% decrease month-over-month to 752,000.