Single-family housing starts and permits for future construction hit a five-year high in August, signaling that the housing market continues to recover despite higher mortgage rates and declines in new multifamily development, Reuters reported Sept. 18.
Single-family housing starts were up 7 percent in August to an annual rate of 628,000 units — the highest increase in six months, according to data released by the U.S. Department of Commerce. Single-family homes account for the largest segment of the market.
“Homebuilding seems to be holding up decently in the higher mortgage rate environment, probably due to the support of strong underlying fundamentals: thin inventories and steady household formation,” Guy Berger, economist at the Royal Bank of Scotland in Stamford, Conn., told Reuters.
New construction for apartments and condominiums, however, declined 11.1 percent in August, which retarded growth in total housing starts to an 891,000-unit pace and fell short of the 917,000-unit rate expected by economists, Reuters reported.
Permits for multifamily homes also fell 15.7 percent in August, pushing down overall permits 3.8 percent to a 918,000-unit pace.