Single-Family Housing Starts Drop Again After Hitting 24-Yr High
If a good portion of your business lies in the single-family housing sector, you're probably one of the few contractors walking around with a smile on your face. Single-family housing starts rose 18.2% in September to a seasonally adjusted annual rate of 1.452 million units. Total housing starts increased by 13.3% in September to a seasonally adjusted annual rate of 1.84 million units, according to the Commerce Department. Regionally, starts rose across the board in September, posting gains of 24.2% in the West, 11.4% in the Midwest, 9.8% in the South, and 9.5% in the Northwest. Reflecting the volatility of the construction market, however, single-family housing starts fell 7% in October to 1.35 million units. While the dropoff was more than expected, the housing market is still fairly robust in the West, which posted a 3.6% gain.
Housing Forecast for 2003
Many markets will continue to slide downhill for 2003, but the National Association of Home Builders (NAHB) expects the housing sector to taper off slightly, but still remain fairly robust. After a record year in 2002, single-family housing starts will drop 2.6% next year to 1.3 million units in 2003. Multi-family housing starts, which posted a 6% gain in 2002, will fall 6.5% in 2003 due to falling absorption rates, rising vacancies, and household migration to single-family homes, according to the NAHB.
Construction Spending
Total September construction activity rose to $836.7 billion, 0.6% above revised August 2002 spending of $831.5 billion, according to the U.S. Census Bureau. During the first nine months of 2002, $633.1 billion of construction was put in place, 0.3% (+/-3.2%) above the $631.1 billion for the same period in 2001.
