Housing Starts Jump 10.5 Percent, Single Family Starts Up 4.3 Percent

After falling considerably in the months following the expiration of the home buyer tax credit, housing starts rose 10.5 percent in August. This brings the annualized sales pace to 598,000 units, the highest level since April. As with housing activity in general, housing starts have been very volatile over the past half year due to the effects of the home buyer tax credit. Housing starts rose in the early part of the year through April, then fell off heavily in the months following. August displayed a rebound and starts were up 2.2 percent from a year prior.

The increase over the month was heavily driven by the volatile multi-family unit component, which rose 32.2 percent over the month. Still, the single family component grew significantly, rising 4.3 percent over the month, after falling heavily for the prior three months. Unlike total starts, single family starts remain down 8.9 percent from a year prior.

New building permits, which tend to lead future starts, rose 1.8 percent. However, this was entirely due to an increase in multi-family unit permits. Single family permits declined by 1.2 percent.