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WASHINGTON -- U.S. home construction plunged in August, led by steep decline in the volatile apartment category. But single-family house construction, a larger and more stable portion of the market, fell only modestly.
Construction fell 14.4 percent in August to a seasonally adjusted annual rate of 956,000 homes, the Commerce Department said Thursday. This reverses the sharp gains in July when the rate of new construction rose to 1.12 million homes, the highest annual rate since 2007.
Last month's decrease primarily came from builders starting fewer apartment complexes, which plummeted 31.5 percent compared to July. Apartments have propelled much of the growth in residential construction over the past year, but the pace has been volatile from month to month. Apartment starts surged 51 percent in July.
In August, the building of single-family houses fell 2.4 percent.
Applications for building permits, a sign of future activity, dipped 5.6 percent to an annual rate of 998,000.
Apartment construction has surged 19.2 percent in the past 12 months. Meanwhile, single-family starts have risen just 4.2 percent. The shift among builders to increased apartment building is a sign that a rising share of Americans will be renters, rather than homeowners.
Jed Kolko, chief economist at the real estate firm Trulia, said that builders are already constructing too many single-family houses. The vacancy rate for these homes was 10.7 percent in 2013, compared to 7.4 percent in 2000, according to the Census.
"We're still building single family homes faster than we can fill them," said Kolko, saying that builders will need to place a greater emphasis on apartments.
Changes in starts for multi-unit homes such as apartments influence the monthly construction totals, but the category accounted for just 32 percent of starts in August. That's up slightly from 29 percent in August 2013.
The growing preference for rentals likely reflects the sluggish, five-year economic recovery. Most incomes remain below their pre-recession levels, making it harder for families to save for a down payment and qualify for a mortgage. The Census Bureau said this week that median household incomes were $51,939 in 2013. Adjusting for inflation, that's 8 percent lower than in 2007, when the recession began.
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Volatile apartment sector reduces U.S. home building
WASHINGTON U.S. home construction plunged in August, led by steep decline in the volatile apartment category. But single-family house construction, a larger and more stable portion of the market, fell only modestly.
Construction fell 14.4 percent in August to a seasonally adjusted annual rate of 956,000 homes, the Commerce Department said Thursday. This reverses the sharp gains in July when the rate of new construction rose to 1.12 million homes, the highest annual rate since 2007.
Last months decrease primarily came from builders starting fewer apartment complexes, which plummeted 31.5 percent compared to July. Apartments have propelled much of the growth in residential construction over the past year, but the pace has been volatile from month to month. Apartment starts surged 51 percent in July.
In August, the building of single-family houses fell 2.4 percent.
Applications for building permits, a sign of future activity, dipped 5.6 percent to an annual rate of 998,000.
In the Twin Cities area, permits for new single-family houses declined 15 percent in August from a year earlier, and permits for new multifamily units were down 78 percent. But two large apartment projects permitted in August of last year make it appear as if multifamily construction is plunging. Apartment units for the year to date are still running 8 percent ahead of the same period in 2013.
Single-family permits in the Twin Cities, however, are down 5 percent for the year to date.
Local homebuilders pulled permits for 531 new housing units in August, down from 1,173 in August 2013, according to the Keystone Report, which tracks residential permits in the 13-county area. Of the 531 new units, 394 were single-family houses and 138 were multifamily units.
Nationally, apartment construction has surged 19.2 percent in the past 12 months. Meanwhile, single-family starts have risen just 4.2 percent. The shift among builders to increased apartment building is a sign that a rising share of Americans will be renters, rather than homeowners.
Jed Kolko, chief economist at the real estate firm Trulia, said that builders are already constructing too many single-family houses. The vacancy rate for these homes was 10.7 percent in 2013, compared to 7.4 percent in 2000, according to the Census.
Original post:
Apartment-sector plunge drags down home building
WASHINGTON Home construction plummeted in August, led by steep decline in the volatile apartment category. But single-family house construction, a larger and more stable portion of the market, fell only modestly.
Construction fell 14.4 percent in August to a seasonally adjusted annual rate of 956,000 homes, the Commerce Department said on Thursday. This reverses the sharp gains in July, when the rate of new construction rose to 1.12 million homes, the highest annual rate since 2007.
Last month's decrease primarily came from builders starting fewer apartment complexes, which plummeted 31.5 percent compared to July. Apartments have propelled much of the growth in residential construction during the past year, but the pace has been volatile from month to month. Apartment starts surged 51 percent in July.
In August, the building of single-family houses fell 2.4 percent.
Applications for building permits, a sign of future activity, dipped 5.6 percent to an annual rate of 998,000.
Apartment construction has surged 19.2 percent in the past 12 months. Meanwhile, single-family starts have risen 4.2 percent. The shift among builders to increased apartment building is a sign that a rising share of Americans will be renters rather than homeowners.
Jed Kolko, chief economist at the real estate firm Trulia, said that builders are constructing too many single-family houses. The vacancy rate for these homes was 10.7 percent in 2013, compared to 7.4 percent in 2000, according to the Census.
We're still building single-family homes faster than we can fill them, said Kolko, who added that builders will need to place a greater emphasis on apartments.
Changes in starts for multi-unit homes such as apartments influence the monthly construction totals, but the category accounted for just 32 percent of starts in August. That's up slightly from 29 percent in August 2013.
The growing preference for rentals likely reflects the sluggish, five-year economic recovery. Most incomes remain below their pre-recession levels, making it harder for families to save for a down payment and qualify for a mortgage. The Census Bureau said this week that median household incomes were $51,939 in 2013. Adjusting for inflation, that's 8 percent lower than in 2007, when the recession began.
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Home construction plunges more than 14% in August
Work is scheduled to begin by the end of the year to put 87 affordable apartments in a century-old building near Union Station in downtown St. Louis.
Sherman Associates, of Minneapolis, said today the project to transform the building at 1900 Pine Streetknown as Station Plazashould be done by late next year. City records show the six-story brick building was erected in 1884.
CBRE said it represented Sherman Associates in acquiring the building from R&P Realty Inc. The deal includes the parking lot just west of the building.
Sherman Associates said it bought the property for about $1.6 million and has a construction budget of $10.5 million. The developer is expected to use low-income housing tax credits in the project.
In addition, the project is in line for tax abatement from the city. In the 1980s, the now-vacant building was renovated as offices.
Tim Bryant covers commercial real estate, development and other business stories for the Post-Dispatch. He blogs at Building Blocks, the Post-Dispatch development blog.
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Building at 1900 Pine to get apartment conversion
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Lawmakers Consider New Smoking Restrictions on Bar Patios
Restrictions Considered for Bar Patios
ROCKFORD (WIFR) If youre a smoker, your outdoor experience may be changing if some lawmakers get their way.
The Illinois Department of Public Help is trying to rewrite the rules for what can be allowed on bar patios, beer gardens, decks, rooftops, or concession areas. Smokers will still be able to light up in those spots, but if the rules are changed, smokers will have to serve themselves. Servers and other employees wont be legally allowed to serve customers smoking in these areas. Some local bar owners fear the proposed changes would affect business and alienate a large portion of their customer base.
"Now you're going to have a lot of people that spent a lot of money to put in patios for smokers to go out there and smoke, as well as for other people to go out and enjoy the area, I think it'll have an impact on business. It'll hurt," said Pete Gwizdala with the Illinois Licensed Beverage Association.
The Department of Public Health says the rules are meant to follow the original intent of the Smoke-Free Illinois Act, although some local politicians who voted for the act, say these new rules go too far.
The rule changes are waiting on a vote downstate in the Joint Committee on Administrative Rules. Theyre a bipartisan group made up of equal amount democratic and republican state senators and representatives.
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Lawmakers Consider New Smoking Restrictions on Bar Patios
INDIANAPOLIS -
Butler University is undergoing a $60 million expansion. Thursday evening, the university will break ground on a new five-story, 1,038-space parking garage. It will be built on what was a parking lot just north of Clowes Hall.
Next spring, construction will begin on what Butler touts as a "state-of-art student housing facility with approximately 600 modern, suite-style beds."
Butler President James Danko said the expansion and upgrades are meant to keep the university competitive.
"We want our community space, our living space to really support the notion of a strong community," Danko said. "More contemporary housing does a much better job in terms of pod living and shared space, so students can be educated both inside and outside the classroom."
Christina Saenger, a senior who lives in Schwitzer Hall her freshman year said, "that's good. I think it needs to happen...obviously (Schwitzer) is very old."
The residence hall, built in 1955, is very much the traditional dorm with small, minimalist two-bunk rooms and shared bathrooms. It's the one student living space that doesn't have air conditioning.
Emma Dolphin, also a senior, said keeping current is important.
"I think of lot of other universities, especially liberal arts schools, are upping the quality of their living situations, even for freshman," Dolphin said.
The two students also say there's a desperate need for the new parking garage.
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Butler set to build new parking, housing facilities
LM Flooring installation Video
Installation Video LM Flooring with 5G short end.
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