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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 home building
WASHINGTON (AP) 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 Dragged Down U.S. Housing Starts in August
File photograph of pedestrians passing the boarded up 74 Grand Street in SoHo that John Dunne is seeking to develop. Photograph: Michael Nagle
The son and wife of bankrupt developer Sean Dunne have altered plans for a proposed development in New York, forcing their company to seek renewed permission from the Landmarks Preservation Commission that oversees building work in the citys historic areas.
TJD 21, the company owned by Mr Dunnes wife Gayle Killilea Dunne and his son John Dunne, submitted revised plans for the proposed development at 74 Grand Street in the fashionable Soho area in Manhattan last month.
The plans involve moving the entrance, stairwell and lift in the five-storey apartment development to the other side of the building.
The internal changes require approval from the commission, because the building is in Sohos protected historic area, before the citys planners can grant the green light, paving the way for construction to begin.
John Dunne included a letter in revised plans filed by his companys planners and engineers last month.
They said that the change was due to the stability of foundation walls on the next-door building.
Sean Dunne, who filed for bankruptcy in the US last year with debts of $942 million (700 million), has said he is working as a paid adviser for the firm owned by Ms Killilea Dunne and her stepson.
The company has told New York planners that it expects to make a profit of $3 million on the $22 million development, selling the four apartments in the building for between $3.3 million and $7.7 million.
The project is the Dunnes largest development in the US since Mr Dunne and his wife moved there in 2010.
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Dunnes change plans for New York apartment building
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With California water regulators having voted to approve fines up to $500 a day for residents who waste water on lawns, landscaping and car washing, the City of Oakdale must now come up with a conservation plan for its residents and 7,000 water customers.
The move on Tuesday, July 15, by the Water Quality Control Board came after its own survey showed that conservation measures implemented voluntarily have failed to achieve the 20 percent reduction in water use sought by Gov. Jerry Brown. Water Control Board survey results showed that water consumption throughout California had actually risen by one percent this past May compared to the same month in previous years.
Under the new statewide rules, any agency that does not impose mandatory conservation measures could be subject to state fines of up to $10,000 a day.
Oakdale City Manager Bryan Whitemyer said the city is in discussion with formulating a plan for more stringent use and have been taking complaints from the public on chronic water wasters, but education and voluntary compliance are being emphasized over levying fines.
Our goal wasnt to make this punitive, but we do have a citation process in effect, Whitemyer said.
Oakdale Public Services Director Thom Clark said the city already has a water conservation ordinance that has most of the things the water board called to have put in place and its only a matter of formalizing a final plan.
The new rules, approved by the water board, impose new restrictions on outdoor water use starting Aug. 1 that could result in fines of up to $500 per violation. The recent guidelines ban washing cars without a nozzle on a hose; watering driveways or sidewalks; using potable water in ornamental fountains; and over-watering landscaping so that water runs off into roads and adjacent properties. Recycled water is exempt.
Our fines arent as high as theirs, said Clark, stating the city gives two warnings before implementing fines.
The fines will apply only to wasteful outdoor watering, including hosing down hard surfaces such as sidewalks and driveways. They also include exemptions for public health and safety, such as allowing cities to power-wash sidewalks to get rid of human waste left by homeless people a complaint merchants repeatedly have in the city.
Clark said when studying water conservation efforts he discovered that private water trucks would hook up to city fire hydrants to fill their tanks.
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Water Plan Finalized
