PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Solid Housing Data for August

By at 17 September, 2020, 3:55 pm

by Raymond J. Keating-

A major area of the economy that has bounced back impressively since the first months of this pandemic has been housing. After three months of strong growth, the latest data from the U.S. Census Bureau points to a housing construction taking a breather in August. Well, kind of, given that the single-family housing market remained strong.

Housing starts came in at a seasonally adjusted annual rate of 1,416,000 in August, which was down by 5.1 percent compared to July, but up by 2.8 percent versus a year earlier. However, single-family housing starts in August registered 1,021,000, which was up by 4.1 percent compared to July.

Source: Federal Reserve Bank of St. Louis, FRED

Meanwhile, building permits – an indicator of future construction – came in at 1,483,000 in August, which was down slightly (by -0.9 percent) compared to July. Again, though, single-family building permits came in at 1,036,000 (again, at a seasonally-adjusted annual rate), which was up by 6.0 percent versus July. It’s also worth highlighting that single-family building permits moved above the February 2020 pre-pandemic level in both July and August.

Source: Federal Reserve Bank of St. Louis, FRED

As SBE Council has noted before, 99.7 percent of employer firms in the residential construction sector have fewer than 100 employees. For good measure, residential investment is a notable chunk of private sector investment in the GDP numbers. So, a strong recovery in housing would be good news for small business and for the overall economy.

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

 

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