September brought a rise of 6.5% in home building after two straight months of declines. An 18.3% increase in multifamily units, which include apartments and condominiums, led to this surge. Starts of single-family homes, which make up nearly two-thirds of the market, barely budged, rising a mere 0.3%.
Builders are confident home buyers will return to the housing market, drawn by an improved job market, higher rental costs, and continuing low interest rates from the Federal Reserve.
Sales of new homes rose in July and August, though sales have yet to reach their pre-recession levels. Building permits fell 5% between August and September, but year-to-date housing starts are up 12% and building permits up 13%.
Home construction figures can be volatile and subject to significant revisions, Tuesday’s report showed new home starts for august were revised to a 1.7% decline, compared with an initial estimate of a 3% decrease.