After nearly a full year of slowing housing activity, housing construction in September finally showed some signs of growth in new and existing housing supply.
Lower mortgage rates may have driven the gains in the housing market, according to the BuildFax Housing Health Report (BHHR). Housing authorizations for single-family homes rose 3.57% month over month in September but fell 0.13% year over year.
Builder confidence also jumped to its highest levels since February 2018, according to the National Association of Home Builders.
“The housing market is beating expectations this month both through the lens of construction activity and home sales, which posted notable growth in September,” said BuildFax Chief Operating Officer Jonathan Kanarek. “Single-family housing authorizations and existing home sales have risen to highs not seen in a year.”
Additionally, the report showed that existing maintenance volume and spend both grew, up 5.54% and 10.33% year over year, respectively. Remodel volume and spend (a subset of maintenance that includes renovations, additions, and alterations) also posted yearly increases of 7.22% and 9.55%.
A majority of the 10 most populous US metros reported a surge in maintenance activity last month. On a trailing 12-month basis, New York City, Washington D.C., and Philadelphia experienced increases across both new construction (including single- and multifamily housing authorizations) and maintenance activity.
New construction in the Big Apple is particularly notable, up 44.25% year over year, while maintenance activity climbed 6.13%. Philadelphia’s maintenance activity, on the other hand, saw the largest uptick of 8.88% and new construction rose 5.97%. Lastly, in Washington D.C., new construction and maintenance grew 7.76% and 5%, respectively.
“Amidst concerns of a recession, it’s promising to see the housing market responding to the impact of mortgage rate decreases and other positive moves in the market,” Kanarek said. “If housing continues showing the promise of growth, or even a leveling off, this activity has the potential to stimulate the larger economy.”