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Construction of new homes down

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Posted at 8:01 AM, Oct 18, 2017
and last updated 2017-10-18 09:04:30-04

WASHINGTON (AP) -- Construction of new homes fell 4.7 percent in September, the biggest decline in six months, reflecting weakness in both single-family activity and apartment building.

The September result left construction at a seasonally adjusted annual rate of 1.13 million units, the Commerce Department reported Wednesday. It was the sharpest decline since a 7.7 percent fall in March.

Single-family building contracted 4.6 percent, while apartment construction was down 5.1 percent.

Construction activity in August declined a revised 0.2 percent, a slightly smaller drop than initially reported. Damage from Hurricanes Harvey and Irma did not have a major impact on the August figures.

 Homebuilding has been sliding this year, but economists remain optimistic that the low level of unemployment will soon spark a rebound in sales and construction. Even though construction activity has fallen in recent months, home building is 6.1 percent higher than a year ago.

Application for new building permits, a sign of future activity, dropped 4.5 percent in September to an annual rate of 1.22 million units.

A survey released Tuesday showed that homebuilders are feeling more optimistic than they have in months about the future. The National Association of Home Builders/Wells Fargo builder sentiment index rose 4 points to 68 in October, the highest reading since May. Readings above 50 indicate more builders see conditions as good rather than poor.

A shortage of homes for sale combined with rising prices has translated into an affordability challenge for many would-be buyers.

 In September, construction was down in all regions of the country except the West, where construction starts rose 15.7 percent.

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