Housing permits and starts fell in September according to the latest figures from the US Census Bureau due to volatility in multi-family construction, but single-family construction has grown more steadily throughout the peak building season.
Permits for privately-owned homes were at a seasonally adjusted annual rate of 1.428mn units in September, according to the US Census Bureau and the US Department of Housing and Urban Development (HUD). That is 2.9pc below the revised August rate of 1.47mn units and 5.7pc below the September 2023 rate.
Housing starts were at a rate of 1.354mn units in September, 0.5pc below the revised August rate of 1.361mn units and 0.7pc below September 2023.
Permits have risen and fallen every other month since April of this year. During that time permits for buildings of five or more units trended in the exact same way: rising in one month only to fall the very next.
Housing starts have followed a similar track as well, only the month-to-month volatility has endured for the entire year. Once again, multi-family housing units have driven the inconsistency. More recently, multi-family homes have declined for two straight months.
Single-family construction
Stripping away the multi-family construction figures reveals that single-family construction has not only been more stable but has been growing consistently in recent months. That growth has been limited in some instances and any rebound has still been evidence of a construction market restrained by weaker buying sentiment fueled by high home prices as well as higher borrowing costs.
Single-family housing permits were at a rate of 970,000 units in September, 0.3pc higher than August's revised rate. That is the highest rate in five months and the fourth-straight month of growth. Permits had fallen each month from January to June, though, and permits in September 2024 were still down 1.2pc compared with the prior year.
Housing starts for single-family units were at a rate of 1.027mn units in September, 2.7pc higher than August and 5.5pc higher than the previous year. Housing starts have only grown for three consecutive months, reflecting the delayed impact of permitting on actual housing construction.
The year-to-year comparisons reflect a housing construction market that is recovering from a weak 2023. But softer permit numbers compared with last year still indicate some hesitation in future demand expectations and the likelihood of a continued gradual and uneven recovery into next year.
Builder confidence rose to 43 points in October compared with 41 in September, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released on 17 October. That reflects some improving sentiment despite affordability concerns in the market, but any mark below 50 points is still indicative of a weak market.
PVC demand varies by end use
The housing market picture has been mixed for polyvinyl chloride (PVC) all year. Demand peaked for some buyers and converters back in May or June, with demand only slowly declining since. But some end use segments like pipe or exterior profiles have reported stable and solid demand even into October.
Pipe production has been buoyed by public investments in infrastructure, such as spending to replace lead pipes used in the US' water infrastructure as part of a recent finalization of an Environmental Protection Agency (EPA) rule requiring all lead pipes be replaced within 10 years.
But for exterior profiles, which covers siding, windows, and doors, the market has also been fairly strong as of late. Resin suppliers to these customers have reported strong ordering patterns, seemingly without concern about inventory buildup before the end of the year.
Stronger single-family construction activity, which would use more siding for example, combined with recent storms in the Southeast US requiring home rebuilding and repair could explain some of this better demand sentiment compared to other PVC end uses.
However, PVC contract pricing has been under pressure due to larger PVC inventories among producers and competition for market share. Argus assessed September PVC contracts as stable from the previous month at 59.5¢/lb, but some customers reported getting modest price decreases in limited instances.
