Housing starts weaken in July

housing beginsWashington, DC — A sharp decline in single-family home construction is another indicator that the housing shortage is showing no signs of abating as rising construction costs, increased mortgage rates and supply chain disruptions continue to slow the market, according to the National Association of Home Builders ( NAHB).

According to a report by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, total housing numbers declined 9.6% in July to a seasonally adjusted annual rate of 1.45 million units.

The July reading of 1.45 million starts is the number of home builders who would start if development continued at this pace over the next 12 months. Within this total number, the number of starters with a single-family home fell by 10.1% to 916,000 seasonally adjusted annual figures and by 2.1% on an annual basis. This is the lowest level for single-family home construction since June 2020. The multi-family sector, which includes apartment buildings and apartments, declined 8.6% to 530,000 year-on-year.

“The decline in single-family home launches is reflected in our latest construction surveys, as housing demand continues to weaken amid higher interest rates, while supply-side builders continue to struggle with higher construction costs,” said Jerry Konter, president of the NAHB and a homebuilder and home builder. developer from Savannah, Georgia. “Builders report declining traffic as housing affordability declines.”

NAHB chief economist, Robert Dietz, added: “A housing recession is underway, with construction sentiment falling for eight straight months while the pace of single-family home construction has slowed over the past five months. However, multi-family construction remains very strong given the strong demand for rental housing, the number of 5+ multi-family homes currently under construction has increased by 24.8% year-on-year.”

On a regional and annual basis, the combined number of single and multi-family homes is 10.7% higher in the Northeast, 0.4% lower in the Midwest, 6.5% higher in the South and 2.2% lower in the West.

The total number of licenses fell by 1.3% in July to 1.67 million units year on year. Single family permits fell 4.3% to a unit rate of 928,000 and are down 5.9% year over year. Multi-family permits were up 2.8% year-on-year to 746,000.

Looking at year-over-year regional permit data, permits are 1.9% lower in the Northeast, 1.9% higher in the Midwest, 2.6% higher in the South and 0.2% higher in the West.

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