September Housing Starts Strengthen 🏗️

Newly published data from the US Census indicates that housing starts, a key metric gauging multi- and single-family construction, grew in September, increasing 7.0% month-on-month from August’s revised figures. The strengthening of September’s Housing Starts offers preliminary insight into future housing supply and confidence among builders.

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As highlighted in a previous Plotify Insight, a large percentage of previous housing starts growth in late-2022 and early-2023 was attributable to multi-family construction, comprising nearly 40% of new housing starts. However, recent months have shown a reversal of trends: multi-family construction now comprises 28% of new housing, while single-family construction has risen to 71%.

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Across all regions, single-family housing starts increased 8.6% to 963K year on year, while the rate for multi-family housing starts plunged by 31.5% year on year to 383K. The most significant decline in single-family housing starts for September was recorded in the Northeast (with a 19.0% month-on-month decline to 47,000 units), with housing starts in all other regions strengthening this month.

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Zooming out, single-unit housing starts remain far below the historical figures since early 2000. John Burns Research and Consulting, a leading housing market data expert, estimates that there is a 1.7 million deficit of single-family homes that continues to grow due to constrained new construction activity across all regions since the Global Financial Crisis.  

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Keeping a close eye on housing starts is vital, given its strong correlation with market dynamics like builder confidence. Housing starts ultimately influence new housing supply, which, if constrained, could put upward pressure on home prices. Additionally, household formation continues to outpace new home construction, with fewer homes available for new home buyers.

Do you want to learn more about current market conditions or other trends and factors that influence the US housing market? Plotify has you covered. Visit our app today to receive regular Insights and updates.

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