August Housing Starts: Near Record Number of Multi-Family Housing Units Under Construction

Housing Starts Decreased to 1.283 million Annual Rate in August

Housing Starts Decreased to 1.283 million Annual Rate in August

From the Census Bureau: Permits, Starts and Completions

Housing Starts:
Privately‐owned housing starts in August were at a seasonally adjusted annual rate of 1,283,000. This is 11.3 percent below the revised July estimate of 1,447,000 and is 14.8 percent below the August 2022 rate of 1,505,000. Single‐family housing starts in August were at a rate of 941,000; this is 4.3 percent below the revised July figure of 983,000. The August rate for units in buildings with five units or more was 334,000.

Building Permits:
Privately‐owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 1,543,000. This is 6.9 percent above the revised July rate of 1,443,000, but is 2.7 percent below the August 2022 rate of 1,586,000. Single‐family authorizations in August were at a rate of 949,000; this is 2.0 percent above the revised July figure of 930,000. Authorizations of units in buildings with five units or more were at a rate of 535,000 in August.
emphasis added

The first graph shows single and multi-family housing starts since 2000 (including housing bubble).

Multi-family starts (blue, 2+ units) decreased in August compared to July.   Multi-family starts were down 41.6% year-over-year in August. Single-family starts (red) decreased in August and were up 2.4% year-over-year.

Note that the weakness in 2022 and early 2023 had been in single family starts (red), however the weakness is moving to multi-family now while single family has bounced back somewhat from the bottom.

The second graph shows single and multi-family starts since 1968. This shows the huge collapse following the housing bubble, and then the eventual recovery - and the recent collapse in single-family starts.

Total housing starts in August were well below expectations, however, starts in June and July were revised up, combined.

The third graph shows the month-to-month comparison for total starts between 2022 (blue) and 2023 (red).

Total starts were down 14.8% in August compared to August 2022.  And starts year-to-date are down 12.5% compared to last year.

Starts have been down year-over-year for 14 of the last 16 months (May and July 2023 were the exceptions), and I expect total starts to be down this year - although the year-over-year comparisons will be easier the rest of the year.

Near Record Number of Multi-Family Housing Units Under Construction

The fourth graph shows housing starts under construction, Seasonally Adjusted (SA).