Housing starts and permits are hot in July
Housing starts continue to demonstrate dramatic growth, fueled by low mortgage rates and an urban exit to the suburbs and beyond.
Total residential starts for July surged 22.6% to a seasonally adjusted annual rate of 1.496 million from the revised June rate of 1.22 million.
The latest report, released today by the Department of Commerce, is 23.4% above the July 2019 rate of 1.212 million.
Single-family starts in July jumped 8.2% to 940,000 compared to a revised June rate of 869,000.
Housing permits for July are at a seasonally adjusted annual rate of 1.495 million, rising 18.8% from the revised June rate of 1.258 million. The latest report is also 9.4% above the July 2019 rate of 1.366 million.
Single-family authorizations in July were at a rate of 983,000, which is 17% above the revised June figure of 840,000.
Lawrence Yun, chief economist of the National Association of Realtors, said the strength in housing is a major contributor to local economic recovery.
"Such growth is needed to steadily relieve the housing shortage," Yun said. "The rise of single-family units is welcome, as overall inventory of homes for sale are down by 19% from one year ago and there is intense buyer competition in the market as a result."
The strong figures in the July 2020 Monthly New Residential Construction report follow yesterday’s news from the National Association of Home Builders (NAHB) that builder confidence matched a record high.
“Strong builder confidence and heavy buyer traffic point to further production gains in the near term, but the more than 110 percent jump in lumber prices since mid-April is adding approximately $14,000 to the cost of each new single-family home,” said NAHB Chairman Chuck Fowke.
Despite rising lumber prices, the housing landscape is ripe for buyers.
“The market is being buoyed by historically low interest rates, a focus on the importance of housing and a shift to the suburbs as more buyers are seeking homes in suburban communities, exurbs and more affordable low density markets,” said NAHB Chief Economist Robert Dietz.
Here’s how July’s number break down by region:
- Northeast: Total starts rose 35.3% as single-family starts declined 2.6%. Total housing permits increased 14.8% as single-family permits are up 7.3%.
- Midwest: Total starts jumped 5.8% and single-family starts egged upwards 0.8%. Overall permits rose 23.8% with single-family permits rising 11.8%.
- South: Total starts soared 33.2% and single-family starts are up 13.3%. Residential permits grew by 13.7% while single-family permits jumped 18.9%.
- West: Total starts climbed 5.8% and single-family starts increased 6.2%. Housing permits rocketed 29.1% with single-family permits rising 18.9%.