US housing starts rebounded slightly in September as construction firms struggle to satisfy booming demand from home buyers, the government reported Tuesday.
The housing market has been one of the few bright spots in the US economy as it struggles with the world’s worst coronavirus pandemic, helped by record low borrowing rates, and Commerce Department data showed home construction started last month rose 1.9 percent after the sharp drop in August.
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But the modest gain came after double-digit increases in May, June and July, putting new projects started at an annual rate of just over 1.4 million, seasonally adjusted, slightly below expectations.
A nearly 15 percent drop in construction of multi-family buildings held down headline growth, according to the report.
But single family housing starts surged to just over 1.1 million annualized, 8.5 percent faster than the prior month before.
All regions saw growth in both overall housing and single family construction, with the exception of the Midwest, where building slumped 32.7 percent overall.
The gains were particularly brisk in the Northeast, where starts rose 66.7 percent.
Mike Fratantoni of the Mortgage Bankers Association pointed to the steep decline in starts of buildings with five or more units as holding back overall growth, but said the 5.2 percent month-on-month growth in construction permits was evidence homebuilders were trying to satisfy demand.
“Builders are gearing up for an even faster pace in the months ahead, which is welcome news for households wanting to buy a new home,” he said in a statement.
“The housing market is being constrained by the lack of inventory, with both new and existing homes being sold faster than new listings are arriving.”
Construction permits issued for single family homes rose 7.8 percent, while multi-family permits grew 1.0 percent, the report said.