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Single-family starts increased 28,000 in August to 535,000, the highest level since April 2010, the ""Census Bureau and Department of Housing and Urban Development reported"":http://www.census.gov/construction/nrc/pdf/newresconst.pdf jointly Wednesday. Despite the increase total, housing starts improved just 17,000 as multi-family starts fell. Housing permits meanwhile dropped 9,000 to 802,000.
[IMAGE]Economists had expected total starts to increase to 768,000 and permits to slip to 803,000.
Total housing completions in August rose to 689,000, the highest level since June 2010.
July starts were revised down to 733,000 from an originally reported 746,000, with most single-family starts adjusted up to 507,000 for the originally reported 502,000 and multi-family starts revised down.
The data release followed another upbeat report on holder confidence for September from the National Association of Home Builders, which said Tuesday its housing market index improved three points in September to 40, the highest level since June 2006.
Despite the one-month drop, permit activity in August was up 24.5 percent from a year earlier.
The slower than expected growth in starts was attributable in part to a drop in the storm-ravaged Northeast, where starts fell 11,000. Starts increased 13,000 in the South despite Hurricane Isaac, but the storm came late in the month and its impact will be reflected in data revisions next month.
The month-month report masks an improving longer term trend. In the first eight months of this year, total starts have averaged 729,250 compared with 582,875 in the same period last year. Single-family starts averaged 506,500 in the first eight months of this year, compared with 421,375 in the same period in 2011.
Permits too have surged: an average of 755,000 per month thus far this year compared with 600,000 in the January-August period last year. Permits for single-family homes averaged 484,375 each month this year compared with 408,125 in the first eight months of 2011.
Completions too are up, averaging 620,625 for the first eight months this year, compared with 581,125 in the same period in 2011. Single-family completions averaged 456,625 thus far in 2012, compared with 446,000 in the first eight months last year. New home sales have averaged 360,000 this year, compared with 300,000 in 2011, so the gap between sales and completions (146,000 per month in 2011 and 104,000 in 2012) is shrinking.
Start activity for multi-family structures (five or more units) underscores the shifts in the housing sector: multi-family starts averaged 212,000 in the first eight months this year, up from 151,000 in the same period a year ago.
Total starts fell in two of the four census regions, dropping 11,000 in the Northeast and 8,000 in the West while increasing 23,000 in the Midwest and 13,000 in the South.
Permits rose month-month in two of the four Census regions, improving 9,000 in the Midwest and 2,000 in the South while falling 13,000 in the West and 7,000 in the Northeast.
