For the fourth consecutive month, new housing production topped an annual rate of 2 million units in July, maintaining a vigorous pace of 2.042 million, which was off a scant 0.1% from an upwardly revised level for the prior month, the U.S. Commerce Department reported last week. Starts in July were 2.18% higher than a year earlier.
“Builders are working hard to keep up with buyer demand,” said NAHB President Dave Wilson. “Even though mortgage rates have edged up in recent weeks, they are still very affordable and continue to fuel the housing market.”
“The fundamental supports for housing demand are still in place,” said NAHB Chief Economist David Seiders. “Financing conditions remain favorable, job formation is fueling household growth and ongoing increases in house values are bolstering the ownership appeal of single-family homes and condo units.”
Single-family home construction edged up 0.5% to a pace of 1.711 million units in July, 3% above July 2004. Multifamily starts lost some ground, eroding by 3.2% to a yearly rate of 331,000, which was 1.8% faster than a year earlier.
Regionally, July’s housing starts were up 9.1% in the Midwest, 6.5% in the Northeast and 2.1% in the West. They declined 5.4% in the South.
Building permits were issued at a seasonally adjusted annual rate of 2.167 million units in July, up 1.6% from June, and single-family permits climbed 2% to a record 1.686 million. Multifamily permits were up 0.4%.
Seiders noted that the backlog of unused permits was historically high at the end of July, particularly in the single-family sector. “Builders have accumulated an unusually large supply of permits in order to meet future housing demand in markets with serious supply constraints. That bodes well for housing production in the near future,” he said.
Source: Aug 2005 Press Release, National Accosiation of Home Builders/nahb.com