August, 2010 housing starts jumped 10.5 percent after rising a modest 0.4 percent in July. The August annualized pace of 0.0.598 million units was higher than analysts' expectations for 0.550 million units. This pace is up 2.2 percent compared to a year ago. August also showed a 32.2 percent surge in multifamily starts, following a 36.0 percent increase in July. The single-family component rebounded 4.3 percent after dipping 6.7 percent in July.
By region, the West was up 34.3 percent, the Midwest was up 23.3 percent, and the South was up 7.0 percent. The Northeast dropped 24.3%.
The single-family starts number is up, but it really seems to just be bumping along in a range. Construction workers will be glad to get work in the improving apartment market. Analysts seem to believe that this number indicates that housing has stabilized. However, one wonders whether or not they are taking into account the foreclosure activity, the REO inventory, and additional resale activity which adds months of existing home inventory to the market.
The MERS-related chain-of-title issue with many existing homes looks as if it may potentially make it harder to sell or finance these types of properties, so perhaps the builders who are responsible for this increase in starts may find that it will be easier for buyers to purchase new homes than resales in the near future.
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