August turns out to have been among the year's strongest periods for residential construction. While analysts had expected builders to shake off some of the lethargy that has dogged the industry for most of the year, increasing at least the rate of housing starts. However results exceeded expectations across the board and the rates of permitting and starts were the highest in a year. On a regional basis, numbers for the Northeast and Midwest more than compensated for some softening in the West.

The U.S. Census Bureau and Department of Housing and Urban Development reported that permits were issued during the month at a seasonally adjusted annual rate of 1,419,000. This is a 7.7 percent increase from the revised rate of 1,317,000 in July and 12.0 percent higher than the permitting pace in August 2018 of 1,267,000.  Permits in July were initially reported at a rate of 1,336,000.

Analysts polled by Econoday had looked for permits to slip slightly to 1,300,000. The range of estimates was from 1,274,000 to 1,336,000.

Permits for building single-family housing were issued at an annual rate of 866,000, a 4.5 percent gain from the revised 829,000 units (from 838,000) in July.  Single-family permits were up 4.5 percent from a year earlier as well. Multifamily permits rose 14.9 percent for the month and 27.3 percent on an annual basis to a rate of 509,000 units.

On a non-adjusted basis there were 127,000 permits issued during the month compared to 118,800 in July. Single-family permits totaled 78,100 compared to 78,200.  For the year-to-date (YTD) there have been 900,600 permits issued, 574,800 of them for single-family units. This represents declines of 1.1 percent and 4.1 percent respectively from the permits issued during the first eight months of 2018.  Multifamily permits are 4.2 percent higher than during the same period last year.

Housing starts jumped 12.3 percent in August, reaching a seasonally adjusted annual rate of 1,364,000.  The rate of starts in July was revised higher as well, from 1,191,000 to 1,215,000.  This moved starts 6.6 percent higher than in August 2018 when the rate was 1,279,000 units.

Starts were well above the highest estimates from Econoday's analysts. They forecast 1,209,000 to 1,275,000 units during the month with a consensus of 1,251,000.

Single-family starts were up 4.4 percent to a rate of 919,000 compared to 880,000 in July.  July's single-family starts were originally estimated at 876,000.  The August number is 3.4 percent higher than in August 2018. Multifamily starts were up 30.9 percent for the month and 13.7 percent on an annual basis to 424,000 units.

Construction was started on 121,100 housing units in August on a non-adjusted basis compared to 115,500 the previous month. Single family starts totaled 82,500 units, down from 84,900 in July. On a YTD basis, total starts are down 1.8 percent compared to last year and single-family starts are down 2.7 percent. There have been 851,600 total starts, 598,100 for single-family units. Multifamily starts are 0.4 percent higher than during the first eight months of 2018, a total of 244,600.

While completions, as a trailing indicator, don't get a lot of attention, but they too had a good month. The rate of completions rose 2.4 percent from July to 1,294,000 and were 5.0 percent higher than a year earlier. The July rate was revised from 1,250,000 to 1,264,000.  Single-family completions rose 37 percent to 945,000 and are slightly (0.6 percent) higher than last August.  Multifamily completions are running at an annual rate of 338,000, an 0.9 percent dip from July.

There were 120,600 units completed during the month on a non-adjusted basis, 84,800 of which were single-family homes. The comparable numbers in July were 109,500 and 75,800. YTD completions are up 4.1 percent to 824,900 and there have been 581,500 single-family homes completed, a 5.7 percent gain over the same period in 2018.

At the end of the reporting period there were an estimated 1,144,000 residential units in some stage of construction, 517,000 of which were single-family units.  There was an additional backlog of 166,000 permits that had been issued but under which construction had not begun.  An estimate 83,000 were for single-family homes.

Permits in the Northeast jumped 26.9 percent from the issue rate in July and were up 37.3 percent year-over-year. Starts were also up strongly, by 30.5 percent and 25.3 percent from the two earlier periods. Completions rose 39.0 percent from July and were 62.2 percent higher than a year earlier.

The Midwest posted a 14.5 percent increase in its permit rate for the month but is down 1.6 percent on an annual basis. Starts jumped 15.4 percent and 12.3 percent for the month and year. Completions dipped by 2.0 percent and 3.4 percent respectively.

Permits were up 11.0 percent in the South compared to July and 14.4 percent higher than in August 2018. Starts were 14.9 percent higher than in July and up 8.1 percent on an annual basis. Completions fell by 5.9 percent from the July rate and 3.8 percent from August 2018.

Permitting fell by 7.8 percent in the West but is still 6.4 percent higher than a year earlier.  Starts were unchanged from the prior month and were down 4.8 percent compared to a year earlier. There was an improving rate of completions in the region - they were 11.0 percent higher than in July and up 13.3 percent from August 2018.