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Multifamily volatility drags down housing starts

"Importantly, the trend in starts for single-family construction remains solid. Privately owned housing starts decreased in September to a seasonally adjusted annual rate of 1.201 million down 5.3% from August’s 1.268 million, but is still 3.7% up from the annual rate of 1.158 million in September 2017. Single-family housing starts stood at a rate of 871,000, up nearly 5% from last year. As we look ahead to October, it is likely Hurricane Michael may also impact starts for the South, though the impact should be materially less given the large markets of Jacksonville, Orlando and Miami were unscathed." Building permits, decreased from August both monthly and annually. The number of homes being built slid 0.6% from 1.249 million in August to a seasonally adjusted annual rate of 1.241 million in September, down 1% from 1.254 million one year ago. Privately owned housing completions decreased to a seasonally adjusted annual rate of 1.162 million in September, down 4.1% from August’s 1.212 million. Single-family housing completions decreased 8.7% from 924,000 in August to a rate of just 844,000 completions in September. “A slow pace of home building, home prices rising much faster than wages, and rising mortgages rates - though they are still below historical averages - are acting to depress the market," Frick continued. "If wages rise at a quick pace, and home prices increase at a slower rate - as we've seen recently - there could be a revitalized home market, but likely not for months.”