Zillow – August Housing Starts: Defying Expectations
- U.S. home builders started 1.615 million homes in August (SAAR), up 3.9% from July and 17.4% year-over-year, according to the Census Bureau.
- Nationwide, building permits were up 6% from July and 13.5% from August 2020, to 1.728 million (SAAR).
- Housing completions fell 4.5% from July but were up 9.4% from a year ago, to 1.33 million (SAAR).
Despite ongoing shortages of key building materials and a tight construction labor market, the nation’s homebuilders are finding ways to defy expectations, keep their pipelines moving and put up more homes. Homebuilder confidence ticked up slightly in September and appears to have leveled off after falling through the summer, suggesting that builders remain bullish on the idea that they will be able to quickly sell the homes they put up. It’s not all perfect, and some creativity is being shown by builders to keep things moving. Many builders clearly have no problem selling unfinished or even unstarted homes — of the new homes sold in July, only about a quarter of them (25.4%) had been completely built, down from more than 40% in Spring 2020 and an indication of a large backlog of homes waiting to be built. And while the number of new homes completed so far this year is up 9.5% year-to-date from the same period last year, starts and permits are both up by more than 20%. The permitting process appears to have slowed in some areas, and existing shortages of key building supplies – including paint, windows and appliances – are likely to persist as the world wrestles with pandemic-driven supply chain challenges. The availability of construction workers and tradespeople exacerbate these difficulties. These choppy waters are unlikely to calm anytime soon, but builders are continuing to find ways to stay afloat.