Nationwide housing starts slipped down 1.1 percent in July to a seasonally adjusted rate of 746,000 units, according to U.S. Department of Housing and Urban Development and U.S. Census Bureau tallies. This news follows a decline in May and a 6.9 percent increase in June. The July numbers show a 21.5 percent year-over-year increase in housing starts.
However, with the decline in housing starts came a 6.8 percent rise, since June, in building permits for planned new-home projects, to a rate of 812,000 — a 29.5 percent year-over-year increase. Permits come before a construction project would get underway.
“While many builders believe that the outlook for housing is considerably brighter than it has been in years, we are being careful about keeping inventories right and not building ahead of demand,” said National Association of Home Builders Chairman Barry Rutenberg in a press statement. “At the same time, builders are drawing more permits for new construction so we can accommodate buyers and renters as they return to the marketplace.”
Broken down by region, the Midwest saw the largest gain in housing starts: a 17 percent month-over-month increase. The biggest decline came in the West, a 5.3 percent month-over-month decline. Housing starts in the Northeast slipped 1.3 percent month-over-month. And broken down by type, single-family housing starts fell 6.5 percent in July, following four months of gains, the NAHB release said. Multi-family starts saw a 12.4 jump last month.
“Increasingly, housing is re-emerging as a traditional and much-needed source of strength in local economies as builders are able to put more of their crews back to work,” said David Crowe, NAHB’s chief economist. “But two things that are slowing this process considerably are the challenges that builders continue to face in accessing credit for viable new projects and the difficulty of obtaining accurate appraisals on new homes.”
On the other hand, building permits posted month-over-month jumps in the Northeast and West: 12.2 percent and 14 percent, respectively. The South posted a 5.8 percent gain — the Midwest was the only region to see a loss: 4.2 percent.
In a statement to The Real Deal, John Tashjian, principal at Centurion Real Estate Partners, said “building permit increases are local to some of the higher growth markets in the country and are not an indicator of the wider U.S. market.” There is still a divide between the “haves” and “have not” markets, he said, and despite the recovering U.S. housing market, “certain stronger metropolitan areas will continue to outpace more troubled markets and the U.S. housing market as a whole.” — Zachary Kussin