WASHINGTON: US single-family homebuilding raced to a more than 13-year high in September, cementing the housing market's status as the star of the economic recovery amid record-low mortgage rates and a migration to the suburbs and low-density areas in search of more room for home offices and schooling.
The report from the Commerce Department on Tuesday also showed building permits and housing completions scaling levels last seen in 2007. That could help to ease an acute shortage of homes for sale, which has fuelled house price inflation.
The data reinforced expectations that the economy rebounded sharply in the third quarter after suffering its deepest contraction in at least 73 years in the second quarter. But the recovery from the Covid-19 recession has entered a period of uncertainty, with fiscal stimulus depleted.
Single-family homebuilding, the largest share of the housing market, jumped 8.5% to a seasonally adjusted annual rate of 1.108 million units last month, the highest level since June 2007. That offset a 16.3% decline in starts for the volatile multi-family segment to a pace of 307,000 units.
Overall, housing starts increased 1.9% to a rate of 1.415 million units last month. Groundbreaking activity rose in the West, South and Northeast, but fell in the Midwest.
Economists polled by Reuters had forecast starts increasing to a rate of 1.457 million units in September.
Homebuilding advanced 11.1% year-on-year, with single-family starts surging 22.3%. Further gains in single-family home construction are likely, with building permits shooting up 7.8% to a rate of 1.119 million units last month, the highest level since March 2007.
Builders are taking advantage of the strong demand, lean inventories and low mortgage rates to ramp-up construction. A survey on Monday showed confidence among single-family homebuilders hit a record high in October.
The housing market has been a bright spot in the economy despite 25.3 million people being on unemployment benefits. Unemployment has disproportionately affected low-wage workers, who are typically young and renters.
Overall permits for future homebuilding increased 5.2% to a rate of 1.553 million units in September, the highest since March 2007. Multi-family building permits slipped 0.9% to a rate of 434,000 units.
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