US Housing Starts Up 17% In Year To August In Supply-Starved Market - Commerce Dept.

US Housing Starts Up 17% in Year to August in Supply-Starved Market - Commerce Dept.

WASHINGTON (UrduPoint News / Sputnik - 21st September, 2021) US housing starts grew more than 17% in the year to August while permits issued for new construction also rose double-digits, the Commerce Department said on Tuesday, signaling efforts by builders to put up more homes in a supply-starved market.

"Privatelyowned housing starts in August were at a seasonally adjusted annual rate of 1,615,000," the department said in a statement. "This is 3.9% above the revised July estimate of 1,554,000 and is 17.4% above the August 2020 rate of 1,376,000."

Housing starts refer to the number of new residential construction projects that begin during any particular month.

Economists polled by US media had projected August housing starts to come in just slightly better at 1.55 million versus July's 1.53 million.

The Commerce Department said permits issued for new construction totaled 1,728,000 in August, up 6% from July's tally of 1,630,000 and 13.5% higher than the August 2020 figure of 1,522,000.

Authorizations for highly-sought singlefamily homes grew by 1,054,000 in August, about 0.6% higher than the revised July figure of 1,048,000.

"Both housing starts and building permits rebounded in the month of August," economist Greg Michalowski said in a comment posted on ForexLive that noted efforts by builders to ramp up supply in a red-hot housing market.

The stronger building activity comes as the Biden administration vowed earlier this month to tackle America's housing crisis of overpriced and undersupplied homes by adding at least 100,000 new and affordable units over the next three years.

Housing shortages have become dire since the financial crisis of 2008 and last year's coronavirus outbreak.

Decades of underbuilding have left the United States with a 6.8-million-home deficit, the National Association of Realtors said. While construction has steadily increased, it's still well below the levels needed to match supply with demand.

The median selling price for existing homes in the United States rose 17.8% in July from a year earlier to hit a record high of $359,900, according to the realtors' association. Prices jumped especially after the outbreak of the pandemic in March 2020 as investment firms rushed to snap up properties at low prices and earn steady incomes from rent. The trend accelerated as more institutional investors started buying rapidly appreciating homes, further eroding affordability.