Developers continue to pull back on new housing as their confidence in the market wanes.
Building departments across the country greenlit 1.35 million permits for new, private housing in July, which was 2.8 percent lower than in June and 5.7 percent fewer than a year ago, according to data released by the U.S. Census Bureau.
Subscribe to TRD Data to unlock this content
However, developers started constructing 5.2 percent more residential units — 1.43 million — in July compared to June, and 12.9 percent more year over year. Builders also wrapped up construction on 1.42 million units in July — a 6 percent growth compared to June, but 13.5 percent fewer units than the year before.
From June to July, housing permits surged about 25 percent in the Northeast, the greatest growth rate among the country’s four regions. Permits plunged the most in the West, where they fell by about 10 percent.
The Midwest, whose real estate market has been gaining momentum of late, notched the greatest boost in permits year over year, of just under 13 percent. The West, again, recorded the largest drop, of roughly 15 percent.
The drops in permit activity come as confidence among builders of single-family homes has also slid.
Builder confidence ticked down one point in August from July, according to an index compiled by the National Association of Home Builders and Wells Fargo. The index was seven points lower compared to August of last year.
Permits for single-family homes ticked up nationwide by 0.5 percent in July from June, but they are down nearly 8 percent year over year, according to the Census figures. Only the Midwest saw a yearly growth in single-family home permits, reporting 3.4 percent.
Sellers are listing more homes of late, hoping to tap into high prices before the market falls into buyers’ favor. Another NAHB survey found that 37 percent of builders cut prices in August, which has held relatively steady over the past few months. The use of incentives, however, was at 66 percent — the highest in the post-pandemic era.