Single-Family Housing Starts, Permits Rise in July
New single-family home starts and permits continued on an upward trajectory in July, according to an Aug. 18 report from the U.S. Commerce Department, but a substantial slide in multifamily activity reduced total new housing construction by 1% for the month to a seasonally adjusted annual rate of 581,000 and reduced combined single-family and multifamily permits by 1.8% to 560,000-unit yearly pace.
“With the impending expiration of the first-time home buyer tax credit at the end of November, July was probably the last month in which to get homes permitted and started in time for customers to take advantage of that valuable incentive,” noted NAHB Chairman Joe Robson.
“Builders were responding to improved demand related to that upcoming deadline and also to the first signs of an economic recovery,” Robson said. “However, it remains to be seen what happens after the tax credit expires, and the severe credit crunch that has curtailed many multifamily projects is looming over single-family builders as well. Congress and the Administration need to take action now in order to maintain the momentum toward a housing and economic recovery.”
“The latest report marks a fifth consecutive month of improvement in single-family housing starts and a fourth consecutive month of improvement in single-family permits,” noted NAHB Chief Economist David Crowe. “This is exactly in keeping with our latest member surveys, which indicate that builders are cautiously optimistic about single-family sales conditions over the next several months.”
However, Crowe warned that “the significant drop-off in multifamily construction and permitting shown in recent months’ reports may be a harbinger of the financing challenges facing all home builders going forward. A severe lack of credit for acquisition, development and construction financing — along with other issues tied to low appraisals and the upcoming expiration of the first-time buyer tax credit — could derail the progress made so far,” he said. “Government action is required to ensure that housing can help generate jobs and economic growth in the days ahead.”
NAHB is calling on Congress to extend the first-time home buyer tax credit for another year and to offer it to all income-eligible buyers. In addition, NAHB is urging Congress to help eliminate the credit crunch, correct faulty appraisal practices and expand Net Operating Loss tax provisions that can help avoid more worker layoffs.
Single-family housing starts rose 1.7% to a seasonally adjusted annual rate of 490,000 units in July, while single-family permits climbed 5.8% to 458,000 units — both at their highest levels since October.
At the same time, multifamily starts tied this April’s record low, skidding 13.3% to a 91,000-unit rate. Multifamily permits plunged 25.5% to 102,000 units.
Largely as a result of slower multifamily production, housing starts fell in three out of four regions in July.
Starts were down 16.3% in the Northeast, 1.4% in the South and 1.6% in the West; and they were up 13% in the Midwest.
July’s housing permits declined 5.2% in the Northeast and 9.2% in the South, but they increased 14.1% in the Midwest and 7% in the West.
Tax Credit Web Site Looks at Opportunity of a Lifetime
Builders and other industry professionals can help spur home sales by referring prospective first-time home buyers to www.federalhousingtaxcredit.com. The NAHB Web site provides detailed information on the $8,000 federal tax credit for first-time home buyers included in the economic stimulus legislation signed into law by President Obama.
Consumers can use the Web site to find information on the tax credit — including a detailed question and answer section. It also includes information about other housing-related and small business measures in the legislation and a number of home-buying resources for consumers.
Spanish Version Also Available Online
A Spanish version of this increasingly popular Web site is also available to provide detailed information on the tax credit to Spanish-speaking first-time home buyers.
Industry professionals are encouraged to highlight either tax credit Web site when marketing to their potential first-time home buyer market.
Want to Know the Housing Starts Through 2017?
Find out in HousingEconomics.com's Long-Term Forecast.
Subscribe and get downloadable Excel tables that feature the housing starts forecast, gross domestic product (GDP), demographics and more.
To learn more, visit www.housingeconomics.com.
Plan to Attend Construction Forecast Conference
Plan to attend or watch the 2009 Fall NAHB Construction Forecast Conference & Webcast on Oct. 21 in Washington, D.C. to get the latest facts, insights and analysis of the housing industry.
Panels of nationally recognized experts at the day-long conference will discuss economic trends, government policies, developments in the housing industry and the results from NAHB's recent surveys.
For more information and to register, visit www.nahb.org/cfc.