U.S. housing starts have 2nd straight drop
WASHINGTON — Homebuilders slowed their pace of construction by 0.8 percent in August, the second straight monthly decline. A steep drop in multifamily construction more than offset a slight gain in singlefamily homebuilding.
The overall drop occurred even though would-be homebuyers face a shortage of properties for sale and escalating prices. Those two forces would normally help spur faster home construction. But builders are struggling with a shortage of skilled workers and rising land costs for development.
The tepid sales numbers suggest that it has become more profitable for companies to build a smaller number of homes for the affluent than to ramp up construction for a broader swath of buyers and renters.
Housing starts slipped last month to a seasonally adjusted annual rate of 1.18 million, the Commerce Department said Tuesday. Starts fell in the Northeast and South but rose in the Midwest and West.
Damage from hurricanes Harvey and Irma didn’t appear to have hurt August housing construction. But the floods, rain and wind struck an area that represents fully 13 percent of U.S. home construction, so building activity could fall in the coming months.
Behind the August drop was a 5.8 percent plunge in groundbreakings for multifamily buildings, such as apartments. This appears to reflect an expectation among builders that more people will shift out of apartments and into single-family homes as more of the millennial generation begins to have children.
On Wall Street Tuesday, stocks capped a day of mostly listless trading with a slight gain, good enough to lift the major U.S. stock indexes to another set of all-time highs.