Hurricanes impacting housing industry

The latest housing starts data is in and it reveals just how much recent disasters have affected various markets

Hurricanes impacting housing industry
The latest housing starts data is in and it reveals just how much recent disasters have affected various markets.

The United States’ Census Bureau report for September revealed some troubling stats for the country’s housing market.

Permits fell 4.3% and construction of new homes fell 4.7%, according to the Bureau. 

The decline in permits is an indicator of the impact hurricanes have had across the country, according to First American.

“In the employment situation, released earlier this month, it was clear that hurricanes demolished the job creation numbers with a decline of 33,000 non-farm payroll jobs created,” First American Chief Economist Mark Fleming said. “Hurricane Harvey significantly damaged or destroyed more than 30,000 homes and Irma similarly damaged over 4,000 homes.

“Residential construction employment, the primary category of labor that build new homes, declined by 3,900, while specialty trade contractors (the plumbers, electricians and other specialized labor that is often involved in renovation and rehabilitation projects) increased by almost 9,000,” he continued. “The decline in residential construction jobs and increase in specialty trade contractors highlights the strong demand, particularly in Texas, for construction workers to renovate and rehabilitate hurricane impacted houses. The challenge of finding skilled labor to build new homes is now being exacerbated by the demand for that same skilled labor to renovate damaged homes.”

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 per cent fall in March.

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 per cent higher than a year ago.

Single-family building contracted 4.6 per cent in September, while apartment construction was down 5.1 per cent.

Construction activity in August declined a revised 0.2 per cent, a slightly smaller drop than initially reported.


With a file from the Associated Press