Housing starts show monthly gain again, but still on track for worst year ever

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Housing starts were up in August for the fourth straight month, the Census Bureau reports today. It’s another sign that the housing market’s worst days have passed -- but this doesn’t mean new-home construction will return to peak levels any time soon.

The seasonally adjusted annual rate of housing starts in August of 598,000 units is up 1.5% from July, but still 29.6% below the same month a year earlier –- and 2008 was by far the worst year for housing starts since the federal government began tracking the data in 1959.

The level of housing starts so far this year is on course to fall below last year’s total of 950,500 units; 2008 marked the first time in the 40-year history of the data that housing starts were below 1 million.
The year-to-date rate of housing starts in August was 379,800 units, down 44% from 678,200 a year earlier.

Construction starts for projects with five or more units was up 35.3% in August from July. Single-family house starts were actually down 3% in August from July.

August’s bump in housing starts was fueled by a 23.8% increase in starts in the Northeast over July. In the West, housing starts for August were unchanged from July. Housing starts in the Midwest were up 0.9% from July, while August starts in the South were down 2.4% from the previous month.

-- Peter Y. Hong