Residential construction rates soared in
July with both permits and starts increasing from their June pace by double digits and topping 2019 numbers for the same period. Completions also
rose, but at a more subdued rate.
The U.S. Census Bureau and Department of
Housing and Urban Development said permits were issued during the month at a
seasonally adjusted annual rate of 1,495,000, an 18.8 percent gain from June.
That June rate was also higher than originally reported, revised from 1,241,000
to 1,258,000. Permitting is now up by 9.4 percent from the same period in 2019.
Permitting was significantly higher than
had been forecast – with estimates among analysts polled by Econoday of 1,200,000
to 1,380,000 units. The consensus was 1,300,000.
Single-family permits were issued at the
rate of 983,000 compared to a revised (from 834,000) June rate of 840,000
units. This was a 17.0 percent change for the month and 15.5 percent
year-over-year. Multifamily permitting jumped 23.5 percent to 467,000 but that
number was down 0.4 percent on an annual basis.
On a non-adjusted basis there were 136,400
permits issued during the month, 92,700 for single-family houses. The June authorizations
numbered 124,000 and 84,300, respectively.
For the year-to-date (YTD), permits are up
2.2 percent from the first seven months of 2019 at 794,800. Single-family
permits are 5.8 percent higher at 526,100 and there have been 244,500
multifamily units authorized, a decline of 4.8 percent.
performed even better than permitting, increasing by 22.6 percent from June to
a seasonally adjusted annual rate of 1,496,000. The June rate was revised
higher, from 1,186,000 to 1,220,000. Starts were 23.4 percent higher than the
estimate of 1,212,000 in July 2019.
The numbers again left analysts’ predictions
in the dust. Starts had been expected to range from 1,169,000 to 1,320,000. The
consensus was 1,240,000.
It was, however, multifamily starts that
drove the huge July gains. They rose 56.7 percent month-over-month to 547,000
from 349,000 and were 67.8 percent higher than a year earlier. Single-family
starts grew by an impressive 8.2 percent as well, to 940,000 from 869,000
(revised from 831,000) and were 7.4 percent ahead of their July 2019 pace.
Starts totaled 139,400 on an unadjusted
basis compared to 114,600 in June. Single-family starts rose from 84,900 to
89,300. YTD starts are now at 763,200, 4.7 percent growth from a year earlier.
Single-family construction has gained 0.9 percent to 519,100 units and multifamily
construction is 14.6 percent higher than during the same period last year at
Completions were also higher on both a
monthly and an annual basis, but with much more modest gains. Units were
completed at an annual rate of 1,280,000 units compared to 1,236,000 (revised
from 1,225,000) the prior month, a 3.6 percent increase. Completions were up
1.7 percent year-over-year. Single-family completions were down 1.8 percent and
0.4 percent from the two earlier periods at 909,000 units. Completed
multifamily units increased by 19.3 percent to 364,000 units, a 9.0 percent
Actual completions during the month were
estimated at 110,900 with single-family units accounting for 75,400. The June
numbers were 109,800 and 81,600, respectively. For the first seven months of
the year there have been 696,300 units of housing completed, 1.0 percent fewer
than during the same period in 2019. Single family completions are up 0.9
percent to 501,400 and 5.4 percent fewer multifamily units have come on line
YTD, a total of 190,000.
Mike Fratantoni, chief economist for the Mortgage Bankers
Association (MBA) said the following about the residential construction report,
“Homebuilders picked up the pace of construction again in July, with both single-
and multifamily starts up strongly. This data lines up with both the strong
gains in MBA’s latest Builder Application Survey, and the substantial increase
in builder confidence reported by the NAHB. Homebuyer demand remains robust,
inventories are tight, and there is a need for new units to keep the pace of
sales going. On another positive note, housing permits were running at an even
faster pace in July, indicating that builders will continue to increase
production in the months ahead. Housing is certainly one of the bright spots in
the struggling economy.”
There were 1,181,000 units under
construction at the end of July, 503,000 of which were single-family units. An
additional 181,000 permits had been authorized under which construction had not
yet begun. Single-family permits accounted for 101,000 of the total.
Permits in the
Northeast grew 14.8 percent compared to June and were up 6.9 percent for the
year. Starts rose 35.3 percent for the month and increased 63.5 percent on an
annual basis. The completion rate during the month was 57.7 percent higher than
in June and was up 6.7 percent from the previous July.
23.8 percent and 32.5 percent respectively from June and from the prior July in
the Midwest. Starts were 5.8 percent and 15.5 percent higher than the two
earlier periods. Completions dropped 26.6 percent from June and 29.6 percent
The South saw
permitting increase 13.7 percent from a month earlier and 8.3 percent on an
annual basis and starts grew by 33.2 percent and 33.0 percent. Completions
edged higher by 1.7 percent and 0.3 percent.
Permitting in the
West gained 29.1 percent in one month and was 1.9 percent higher than in July
2019. Starts increased by 5.8 percent but remained 3.1 percent lower than a
year earlier. There were 13.2 percent more completions than in June and 24.5
percent more than in July 2019.