Nationwide housing starts edged down 1.5 percent to a seasonally adjusted annual rate of 604,000 units in July, according to figures released by the U.S. Commerce Department. The slight decline comes on the heels of significant gains in housing production in June, and was attributable to a moderate drop-off on the single-family side while production of multifamily units continued upward.
“Although single-family housing production slid a few notches in July, the number was right in line with the second quarter average, so we view this report as an indication of relative stability,” says Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. “This is in keeping with the fact that not much has changed over the past several months with regard to the outlook for new-home sales and production. Both builders and buyers continue to exercise a great deal of caution due to uncertainty about the current economic climate, the large number of foreclosed homes on the market, and concerns about access to credit.”
“Overall housing production held relatively steady in July, with construction of new multifamily projects showing greater strength due to higher demand for rental units,” notes NAHB Chief Economist David Crowe. “Going forward, we expect housing production to show modest improvement through the end of this year, particularly in select markets that do not have large inventories of distressed homes and where economic stability is more apparent.”
Single-family housing starts declined 4.9 percent to a seasonally adjusted annual rate of 425,000 units in July, on par with their second-quarter average. Multifamily starts rose 7.8 percent to a seasonally adjusted annual rate of 179,000 units, their highest level since January.
Starts activity was mixed across the four regions in July, with the Northeast’s 34.7 percent gain countered by a 37.7 percent decline in the Midwest, a 5.6 percent gain reported in the South, and a 3.0 percent decline posted in the West.
Issuance of building permits, which can be an indicator of future building activity, fell 3.2 percent to a seasonally adjusted annual rate of 597,000 units in July. While single-family permits were virtually unchanged with a 0.5 percent gain to 404,000 units, multifamily permits registered a 10.2 percent decline to 193,000 units.
Regionally, permits gained 18.3 percent in the Northeast and 3.6 percent in the South, but fell 7.1 percent in the Midwest and 7.8 percent in the West in July.
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