The National Association of Home Builders is reporting this week rising housing affordability concerns in the U.S. continue to weigh on single-family production even as total housing starts edged higher in October 2018.
According to newly released data from the U.S. Department of Housing and Urban Development and the Commerce Department, total housing starts rose 1.5 percent in October to a seasonally adjusted annual rate of 1.23 million units from an upwardly revised September reading. Year-to-date, new housing starts are 5.6 percent above their level over the same period last year.
The October reading of 1.23 million is the number of housing units builders would start if they maintained this pace for the next 12 months. Within this overall number, single-family starts edged down 1.8 percent to 865,000 units. Meanwhile, multifamily starts--which include apartment buildings and condos--rose 10.3 percent to 363,000.
"This month's decrease in single-family starts isn't a surprise given the drop in our builder confidence index," said NAHB Chairman Randy Noel. "Builders are showing caution as mounting housing affordability concerns are forcing some consumers to delay making a home purchase."
"Single-family starts were strong at the beginning of the year, but weakened this summer and have remained soft," said NAHB Chief Economist Robert Dietz. "Despite this softness, 2018 construction volume is set to be the best since the downturn. A growing economy and positive demographic tailwinds are supporting housing demand as interest rates rise. However, policymakers should take note of the November decline in builder confidence as a sign that housing affordability conditions will weigh on the housing market going forward."
Overall permits--which are an indicator of future housing production--registered a 0.6 percent drop in October to 1.26 million. Single-family permits fell 0.6 percent to an 849,000 unit pace while multifamily permits dropped 0.5 percent to an annualized rate of 414,000.
Looking at the regional numbers on a year-to-date basis, combined single-family and multifamily housing starts rose 13.5 percent in the West and 5.5 percent in the South. Starts fell 0.6 percent in the Midwest and 4.8 percent in the Northeast.
Also on a year-to-date basis, permit issuance rose 7.6 percent in the South and 3.9 percent in the West. Permits were down 2.4 percent in the Midwest and 5 percent in the Northeast.
The Greater Las Vegas Association of Realtors is reporting this week that local home prices slipped in October, with more homes on the market and fewer people electing to buy homes in Southern Nevada compared to the same time last year.
According to the recently released CBRE U.S. Seniors Housing & Care Investor Survey, the appetite for senior housing acquisitions in the U.S. remains strong, with nearly two-thirds of investors planning to increase the size of their portfolios over the next 12 months.
According to the Greater Las Vegas Association of Realtors, after climbing steadily since 2012, local Las Vegas home prices have been hovering this summer through August 2018, are maintaining the same home prices as they were back in May 2018.
Sales of newly built, single-family homes inched down 1.7 percent in July to a seasonally adjusted annual rate of 627,000 units after an upwardly revised June report. On a year-to-date basis, sales are up 7.2 percent from this time last year.
Join 34,000+ real estate professionals worldwide who receive our free weekly newsletter