U.S. housing starts decreased last month for the fifth time in six months, a sign home builders are struggling to keep pace with solid buyer demand.
Housing starts fell 4.7% in September from the prior month to a seasonally adjusted annual rate of 1.127 million, the Commerce Department said Wednesday. Residential building permits, which can signal how much construction is in the pipeline, fell 4.5% to an annual pace of 1.215 million last month. Economists surveyed by The Wall Street Journal had expected a 0.8% decrease for starts, while estimating that permits fell 5.4%.
The Commerce Department said responses in August for building permit activity were "not significantly lower than normal" in the areas impacted by Hurricanes Harvey and Irma.
Housing-starts data are volatile from month to month and can be subject to large revisions. Looking beyond monthly volatility, starts in the first nine months of the year were up 3.1% from the same period in 2016. Permits during this period increased 5% from a year earlier.
New residential construction reached a postrecession high in October 2016, but has eased slightly since and remains well below levels reached in the years preceding the 2008 financial crisis.
Starts fell in September for single-family construction and decreased for multifamily construction. Permits last month were up for single-family homes but down for buildings with more than 2 units.
The National Association of Home Builders on Tuesday said its index that measures confidence in the market for new single-family homes rose to 68 in October from 64 in September, slightly below the postrecession peak touched in March.
"This month's report shows that home builders are rebounding from the initial shock of the hurricanes," said Home Builders Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas. "However, builders need to be mindful of long-term repercussions from the storms, such as intensified material price increases and labor shortages."
The Commerce report can be found at http://www.census.gov/construction/nrc/pdf/newresconst.pdf
Write to Sarah Chaney at firstname.lastname@example.org and Sharon Nunn at email@example.com
(END) Dow Jones Newswires
October 18, 2017 08:45 ET (12:45 GMT)