Housing Starts Hold Ground in July

National Association of Home Builders
August 21, 2018
Markets

According to newly released data from the U.S. Department of Housing and Urban Development and the Department of Commerce, total housing starts moved up 0.9 percent in July to a seasonally adjusted annual rate of 1.17 million units.

The July reading of 1.17 million is the number of housing units builders would begin if they kept this pace for the next 12 months. Within this overall number, single-family starts held firm, up 0.9 percent to 862,000 units. 

“Builder confidence remains solid, although it has fallen back somewhat in recent months due to rising construction costs in 2018, including lumber,” says Randy Noel, chairman of the National Association of Home Builders. “As builders grapple with higher costs, one positive development is that lumber prices have shown signs of easing the past two months off their record high levels posted in June.”

Some projects are experiencing construction start delays due to cost concerns, with the number of single-family units authorized, but not started, up 25 percent since July 2017.

“Supply-side challenges including increases in material prices and chronic labor shortages are affecting affordability in many markets,” says Robert Dietz, NAHB Chief Economist. “However, consumer demand remains strong due to a growing economy and job market and favorable demographics. Moreover, on a year-to-date basis, single-family construction has shown steady progress, up 7.2 percent.”

Overall permits, which are often a harbinger of future housing production, rose 1.5 percent to 1.31 million units in July. Single-family permits posted a modest gain of 1.9 percent to 869,000.