New-home construction in July stumbled as the rate of single-family building dropped 6.5 percent and the overall homebuilding rate-including single-family and multi-family building-dipped 1.1 percent, according to the latest figures from the U.S. Department of Commerce released today.
New-home construction in July stumbled as the rate of single-family building dropped 6.5 percent and the overall homebuilding rate-including single-family and multi-family building-dipped 1.1 percent, according to the latest figures from the U.S. Department of Commerce released today.
The annual single-family building rate sunk to 502,000 in July, putting it below the revised June estimate of 537,000. Year-over-year, the picture for single-family homebuilding is better, up 17.0 percent from the July 2011 pace of 429,000 units.
Overall homebuilding reached an annual pace of 746,000 in July, down from the June estimate of 754,000 units. The current pace of overall building is 21.5 percent higher than the July 2011 rate of 614,000. Even though the long-term trend is positive, the rate of U.S. homebuilding is still a long way from the 1.5-million-unit pace economists say is healthy.
"It looks like things have turned up for housing," Brian Jones, a senior U.S. economist at Societe Generale in New York, told Bloomberg. "We are moving in the right direction. We are coming off such a low base that we still have a long ways to go."
"While many builders believe that the outlook for housing is considerably brighter than it has been in years, we are being very careful about keeping inventories tight and not building ahead of demand," said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. "At the same time, builders are drawing more permits for new construction so we can accommodate buyers and renters as they return to the marketplace."
"Our latest surveys confirm builders' increased confidence about future home buyer demand, and that's reflected in today's permit numbers," said NAHB Chief Economist David Crowe. "Increasingly, housing is re-emerging as a traditional and much-needed source of strength in local economies as builders are able to put more of their crews back to work. But two things that are slowing this process considerably are the challenges that builders continue to face in accessing credit for viable new projects and the difficulty of obtaining accurate appraisals on new homes."