ConDig (20-Oct-20). Construction of new homes in the US increased 1.9% in September as sales continue to be supported by low interest rates.
The rise took construction to a seasonally adjusted annual rate of 1.42 million units, according to latest figures from the U.S. Census Bureau.
Single-family starts shot up 8.5% to a 1.11 million seasonally adjusted annual rate, which is the highest pace of single-family starts since June 2007.
But the multifamily sector, which includes apartment buildings and condos, tumbled 16.3% to a 307,000 pace.
Overall permits, which are a sign of future construction activity, increased 5.2% to a 1.55 million unit annualized rate in September.
“Demand is being supported by low interest rates, a suburban shift in demand and demographic tailwinds,” said Robert Dietz, chief economist for the National Association of Home Builders (NAHB).
“However, headwinds due to limited building material availability is slowing some construction activity despite strong demand, with authorized but not started single-family homes up 22.4 percent compared to a year ago.”
Lumber prices surged 14.9% in August, marking the largest four-month gain since such data was first recorded in 1949 and the second-largest gain since seasonally adjusted data became available in 1975, NAHB reported last month.
Such a sharp uptick in lumber costs has put unnecessary pressure on home owners and builders alike to figure out how to close the gap, NAHB said.