Single-Family Housing Starts fell for the second consecutive month, dropping to a seasonally-adjusted, annualized 417,000 units in August 2011.
A “Housing Start” is defined as a home on which ground has broken.
We shouldn’t put too much faith in the findings, however. Although housing starts were lower last month, as noted by the Census Bureau, the margin of error in the August Housing Starts report exceeded the actual result.
From the official report:
- August’s Published Results : -1.4% from July
- August’s Margin of Error : ±10.3% from July
Therefore, August’s Housing Starts may have actually increased by up to +8.9% from July, or it may have dropped as much as -11.7%. We won’t know for sure until several months from now, after the Census Bureau has gathered more housing data.
One thing is certain, though — the long-term trend in Housing Starts is “flat”. There has been little change in new home construction since last summer.
The same can’t be said for Building Permits.
Considered a pre-cursor to Housing Starts, Single Family Building Permits climbed 2.5 percent with a minuscule Margin of Error of ±0.9 percent.
As is common in real estate, results varied by region:
- Northeast : +3.3 percent from July
- Midwest : +6.3 percent from July
- South : -1.3 percent from July
- West : +11.3 percent from July
When permits are issued, 86 percent of them begin break ground within 60 days. Therefore, expect Housing Starts and new home inventory to rebound in the months ahead.
For now, housing remains steady. And, with mortgage rates at all-time lows, homebuyer purchasing power in an around Minneapolis is higher than it’s been in history. If you’re in the process of shopping for a home, talk with your lender to plan your mortgage budget.