Housing Turns Up in August

By at 18 September, 2019, 6:14 pm

by Raymond J. Keating-

Housing has had a tough time in 2019, that is, until we hit August, according to the latest data from the U.S. Census Bureau on both housing starts and permits.

In August, housing starts jumped by 12.3 percent compared to July (at a seasonally adjusted annual rate). In fact, housing starts hit the highest level since June 2007. The August 2019 level was 6.6 percent higher than August 2018. (See following chart.)

Source: Federal Reserve of St. Louis, FRED

As for housing permits – a gauge for future housing construction – they increased by 7.7 percent over July. Compared to year earlier, permits grew by 12.0 percent. (See following chart.)

Source: Federal Reserve of St. Louis, FRED

Of course, housing data are subject to major revisions and are highly volatile from month to month, but this is a positive signal for the economy coming from the important housing sector.

For good measure, it’s a plus for small business. Make no mistake, housing is a major industry that is almost all about small business, given that 97.4 percent of employer firms in the residential building construction industry have fewer than 20 employees, and 99.7 percent fewer than 100 workers.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

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