The Official Online Weekly Newspaper of NAHB
Nationwide housing starts inched up 1.7% to a seasonally adjusted annual rate of 546,000 units in July from a downwardly revised figure in the previous month, according to U.S. Commerce Department figures released on Aug. 17.
The gain occurred entirely on the multifamily side, with single-family housing production falling 4.2% to 432,000 units, its lowest point since May of 2009.
The small improvement in overall housing production this July was due to a 32.6% jump on the more volatile multifamily side, which brought that sector back closer to trend at a 114,000-unit rate following a major dip in the previous month.
"Builders are very reluctant to build more homes in view of the current state of the economy and weak buyer demand," noted NAHB Chairman Bob Jones.
"Right now the housing market is essentially in a holding pattern," acknowledged NAHB Chief Economist David Crowe. "As our latest member surveys have indicated, builders are seeing greater hesitancy among potential home buyers who are uncertain about what's in store for the economy and jobs going forward. That said, favorable home buying conditions including historically low mortgage rates and low house prices should help spur additional demand as the job market gradually improves later this year."
Two regions registered improved starts activity in July, with the Northeast and Midwest each posting double-digit gains, of 30.5% and 10.7%, respectively. The South, which is the country's largest regional housing market, posted a 6.3% decline in starts this July, while starts in the West were flat.
Permit issuance, which can be an indicator of future building activity, declined 3.1% to a seasonally adjusted annual rate of 565,000 units in July.
Single-family permits fell 1.2% to 416,000 units, while multifamily permits dropped 8% to 149,000 units.
Regionally, permits fell nearly 26% in the Northeast, 1.1% in the Midwest and 4.9% in the West, but gained 3.9% in the South in July.