Single-family housing starts increased in September as the Federal Reserve began easing monetary policy and builder sentiment improved. Multifamily construction, however, declined sharply due to tighter financing and a surge in completed apartments.
According to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, total housing starts fell 0.5% in September, reaching a seasonally adjusted annual rate of 1.35 million units. Within that figure, single-family starts rose 2.7% to an annual rate of 1.03 million units, showing a 10.1% year-to-date increase. The National Association of Home Builders (NAHB) noted that this rise paralleled gains in builder sentiment.
However, higher mortgage rates in October are expected to slow single-family construction in the near term. The NAHB predicts a gradual decrease in rates over the coming months, which may support modest growth in single-family home building.
Image: National Association of Home Builders (NAHB)
Multifamily construction, which includes apartments and condominiums, dropped 9.4% to a 327,000 annualized pace, the lowest since May. This sector remains weak, with apartment completions continuing to outpace new construction. The completion rate for multifamily projects increased by 41% compared to last year.
Regionally, combined single-family and multifamily starts are up 9% in the Northeast but down in other regions: 2% in the Midwest, 4.6% in the South, and 5.4% in the West.
Image: National Association of Home Builders (NAHB)
Building permits, a key indicator of future construction, declined 2.9% overall to a rate of 1.43 million units. Single-family permits saw a slight increase of 0.3% to 970,000 units, while multifamily permits dropped 8.9% to 458,000 units.
As of September, there were 642,000 single-family homes under construction, down 4.5% from a year ago. The number of multifamily units under construction decreased by 3.4%, totaling 842,000 units, a 16.5% decline from last year and the smallest count since February 2022.
Image: National Association of Home Builders (NAHB)
