After a steep drop in new housing starts in July, construction rebounded in August, rising a seasonally adjusted 12.2% to 1.58 million, Realtor.com reports. Starts are still well below the 1.81 million level seen in April, but the construction pace of single-family homes rose 3.4% in August, while apartments rose 28.6%.
Single-family construction in the Midwest rose 20.8%, and construction starts also increased in the South, but the Northeast saw a steep drop of 17.3%. Despite small gains in new construction starts, building permits fell 10% in August, signaling a possible slowdown in the months ahead.
And even the boost in housing starts may be short-lived: In September, builders said they continue to be pessimistic about the near-term, which hints at further declines in the housing sector.
Outside of the pandemic, builder confidence is at the lowest level in eight years.
Depressed buyer demand and rising construction costs have weakened buyer confidence. The sharp rise in rates and high home prices have discouraged buyers, who are finding it hard to afford to purchase.