Housing Construction Holds Steady in July

Total housing starts declined 1.5% but the number conceals opposite moves in the single-family and multifamily sectors. Multifamily construction (buildings with two or more units) continued its advance, increasing 7.8% to a seasonally-adjusted annual rate of 170,000. Single-family starts declined 4.9% but from an elevated June figure. July single-family starts were even with the second quarter average and July single-family permits were also virtually unchanged from June and from the second quarter average.

The relatively unchanged single-family picture was reinforced in the NAHB/Wells Fargo Housing Market Index for August which also remained even with the July figure at 15. Builders continue to compete against low demand and excess supply in some markets from foreclosures, short sales and other distressed sales. Multifamily permits were down national and in all but the South region, suggesting some moderation in the growth in apartment building in the second half of 2011.

Single-family permits were near even on a national level but up in the Northeast and West, even in the Midwest and down 1.4% in the South. Homes under construction remained very near their levels of the past three months as builders saw no signs to either hurry or slow building activity. Housing completions did surge in the South where single-family completions went from a second quarter average of 226,000 to 269,000 and multifamily went from a second quarter average of 40,000 to 92,000. Both increases were greater than the national increase and are likely catch up construction from unusually bad weather and floods.



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