Backlog of homes authorized but not started is a promising metric
New housing starts bounced back to a seasonally adjusted rate of 1.72 million units in August, according to stats released by the Census Bureau and Department of Housing and Urban Development.
The August pace was 3.9% above the revised July estimate of 1.55 million units and was 17.4% above the 1.38 million rate in August 2020. Single-family housing starts were at a 1.07 million rate (-2.8% month over month), while multifamily starts were 530,000 last month.
“New home starts recovered in August, following a brief period of decline in July due to supply chain issues,” said Kelly Mangold, principal at RCLCO Real Estate Consulting. “The backlog of homes authorized but not started has grown to record levels over the late spring and summer, and as builders are able to secure materials and labor it is not surprising to see starts begin to pick back up. This backlog is a promising metric, and while some of the pipeline of units may be canceled, it is likely that a good share of the backlog will make it to market due to robust housing demand.”
Read more: Home construction: what's happening?
Overall authorizations of privately-owned residential units also increased by 6% from the revised July rate of 1.63 million to a 1.72 million rate in August. Single-family building permits edged up 0.6% to 1.05 million, and multifamily permits were at a 632,000 pace.
However, housing completions dropped from 1.39 million units to 1.33 million units month over month but are 9.4% above the same time last year. The number of single-family homes completed in June rose 2.8% month over month to 971,000 units. The August rate for multifamily units was 356,000.