Single-family housing permits – a sign of future construction activity – increased marginally by 0.6%, though overall permits dropped 13.9% as multifamily slows.
WASHINGTON – July’s overall housing starts increased 3.9% to a seasonally adjusted annual rate of 1.45 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
Housing start counts are based on a full year, and the July reading of 1.45 million is the number of housing units that would be built if July’s pace continued for the next 12 months.
Within that overall number, single-family starts increased 6.7% month-to-month to 983,000 –a seasonally adjusted annual rate – and they increased 9.5% year-to-year.
The multifamily sector, which includes apartment buildings and condos, decreased 1.7% to an annualized 469,000 pace.
“With many homeowners choosing to stay in their existing home to preserve their low mortgage rate, demand for new home construction pushed up single-family starts in July even as builders continue to struggle with increased uncertainty stemming from rising (mortgage) rates,” says Alicia Huey, chairman of the National Association of Home Builders (NAHB), noting that this month’s builder sentiment index fell for the first time in seven months, due to a decline in buyer traffic.
“Total permits declined 13% compared to a year ago, indicating that builders are slowing construction activity as housing costs rise,” says Danushka Nanayakkara-Skillington, NAHB’s assistant vice president for forecasting and analysis. “In fact, multifamily permits are at their lowest three-month moving average since December 2020, another sign that the market is cooling.”
The number of single-family units currently under construction fell 16.9% year-to-year, but the number of apartments under construction increased to 1 million, the highest total on record.
On a regional and year-to-date basis, combined single-family and multifamily starts are 17.6% lower in the Northeast, 13.8% lower in the Midwest, 9.4% lower in the South and 16.7% lower in the West.
Overall permits increased 0.1% to a 1.44 million unit annualized rate in July. Single-family permits increased 0.6% to a 930,000 unit rate. Single-family permits are also up 1.3% compared to a year ago. Multifamily permits decreased 1% to an annualized 512,000 pace, the lowest level since October 2020.
Looking at regional permit data on a year-to-date basis, permits are 24.2% lower in the Northeast, 20.3% lower in the Midwest, 15.4% lower in the South and 21.6% lower in the West.
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