For the last five years, residential construction throughout the country has been on the rise, and recent data shows that the trend will likely continue into the near future.
The U.S. Housing starts for August 2017 report issued by the U.S. Census Bureau indicates that residential construction has slowed slightly since July, but building permits are on the rise which indicates that new construction is on the horizon.
U.S. Housing Starts August 2017: By the Numbers
- 1.3 million building permits issued in August 2017. This seasonally adjusted rate increased by 5.7 percent since July 2017 and showcases an 8.6 percent increase from August 2016.
- 1.18 million housing construction starts in August 2017. This seasonally adjusted rate dipped .8 percent from July 2017, yet still represents a 1.4 percent increase since August 2016.
- 1.075 million housing completions in August 2017. This seasonally adjusted rate decreased by 10.2 percent since July 2017, but it is still 3.4 percent higher than the August 2016 rate.
The sluggish month for construction in August is not cause for builders and developers to worry. Rather, it’s indicative of seasonal trends, as the end of the summer is generally a slower time of year for both residential real estate and new home construction. During the month of August, many homeowners and potential buyers are settling down as they take their final summer vacations and prepare their children for the upcoming school year.
The U.S. Census Bureau also notes that month-to-month trends can appear irregular, and that it takes up to 3 months for activity to become a trend worth monitoring.
During the latter part of August, the real estate and building world held its breath along with the rest of the country as two major hurricanes made landfall in the United States.
In the last week of August, Hurricane Harvey arrived in Texas, and its record-breaking flooding had the potential to wreak havoc on the burgeoning residential construction industry in the state. The U.S. Census Bureau reported, however, that the jurisdictions that were impacted during this storm at the end of the month still provided relatively typical data. The bureau expects that the September 2017 report, due out at the end of October 2017, will provide more insight into the possible impact of Hurricane Harvey.
Hurricane Irma, which made landfall in Florida at the beginning of September, did not impact the results of the new home sales August 2017 report.
While the report highlighted a slight downturn in activity for the month of August, it also offers hope to builders and developers who want to capitalize on the growing nationwide housing market. Residential home construction is on the rise, and the demand for single-family homes continues to increase. Currently, single-family home construction is outpacing multi-unit properties.
In the last year, the number of single-family homes constructed throughout the country increased by 17 percent. During that same time period, construction of buildings with five or more units decreased by more than 23 percent.
In all likelihood, the minimal slowdown during the month of August is only going to be a blip on the radar for the residential construction and building industry.
Since 2012, new home construction has been steadily on the rise, and it appears that the trend will continue in the months ahead. Industry experts and real estate insiders are optimistic about the future, particularly since existing home inventory has been low across much of the country.
The demand for new residential properties is high, and builders are ready to meet the needs of the housing market.