Housing starts activity dries up as building industry suffers from economic fatigue

Within the overall construction figure, single-family starts fell 9.2% to a 1.05 million annualized rate. The multifamily sector, which includes apartment buildings and condos, saw a staggering 23.7% decline to an annualized 498,000 pace.

“Single-family home building is slowing as the impacts of higher interest rates reduce housing affordability,” said Jerry Konter, chairman of the National Association of Home Builders (NAHB). “Moreover, construction costs continue to rise, with residential construction materials up 19% from a year ago. As the market weakens due to cyclical factors, the long-term housing deficit will persist and continue to frustrate prospective renters and home buyers.”

In further signs that the housing market is weakening, NAHB chief economist Robert Dietz noted that single-family permits are down 2.5% on a year-to-date basis, and home builder confidence has declined for the last six months.

Read more: Faltering builder confidence a “clear sign of a slowing housing market”

Meanwhile, housing completions are on the rise due to the acceleration in construction activity in recent quarters, up 9.1% month over month to a seasonally adjusted rate of 1.47 million. Single-family completions increased 8.5% to 1.04 million, and multifamily completions were 417,000 as inventories start to recover.