Housing starts reached their highest level in more than four years in September, according to the latest numbers from the Census Bureau.
Builders started construction on new homes and apartment units at a seasonally adjusted annual rate of 872,000 units in September. That’s up 15 percent from August and 34.8 percent from a year ago, and the fastest pace of new housing construction since July 2008.
Housing starts have been rising on an annual basis since September 2011 and are now 82 percent above their April 2009 trough — 478,000 — according to census records dating back to January 1959.
Financial blogger Bill McBride said he expects builders will continue playing catch up for years to come, providing support for an economic recovery.
"My estimate is the U.S. will probably add around 12 million households this decade, and assuming no excess supply, total housing starts would be 1.2 million per year, plus demolitions and second-home purchases," McBride wrote on the blog Calculated Risk. "So housing starts could come close to doubling the 2012 level over the next several years — and that is one of the key reasons I think the U.S. economy will continue to grow."
In another sign that a housing recovery is beginning to settle in, builder confidence ticked up for the sixth month in a row in October, reaching its highest level since June 2006, the National Association of Home Builders reported this week.
Despite these gains, tight credit, difficult appraisals and a scarcity of buildable lots all temper builder confidence from rising at a faster pace, said NAHB Chief Economist David Crowe. More builders still believe the conditions for selling homes are not good compared to those that do, he said.
Source: Calculated Risk
Single-family housing starts were up 11 percent in September from August, to an annual rate of 603,000, representing a 42.9 percent increase from last September and 71 percent above the tally’s March 2009 bottom of 353,000.
Regionally, the Census Bureau showed the West leading the way in September with a 20.1 percent monthly jump in its housing starts rate, reaching 131,000. The South’s annual rate followed with a 19.9 percent increase in September, to 451,000. The annual rate in Midwest saw a 6.7 percent jump to 143,000 in September, while the Northeast’s dropped 5.1 percent to 75,000.
All regions, as they did in August, posted strong, double-digit-percentage, year-over-year annual housing start rate increases in September, with the Midwest leading the way with a 47.4 percent jump from last September, followed by the South with a 37.1 percent increase, the Northeast with a 27.1 percent increase and the West with a 25.3 percent increase.