Single- and multi-family housing starts each posted solid gains in July, with total housing production up 22.6% to a seasonally adjusted annual rate of 1.5 million units, according to a report from the U.S. Housing and Urban Development and Commerce Department. This is the highest production rate since February.
The July reading of 1.5 million starts 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 increased 8.2% to a 940,000 seasonally adjusted annual rate. The multi-family sector, which includes apartment buildings and condos, jumped 58.4% to a 556,000 pace.
“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 Chuck Fowke, chairman of the National Association of Home Builders (NAHB) and a custom home builder from Tampa, Fla.
“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 Robert Dietz, chief economist for NAHB.
On a regional and year-to-date basis (January-July 2020, compared to that same timeframe a year ago), combined single- and multi-family starts are 9.3% higher in the Northeast, 5.9% higher in the Midwest, 5.2% higher in the South, and 1.4% higher in the West.
Overall permits increased 18.8% to a 1.5 million unit annualized rate in July. Single-family permits increased 17% to a 983,000 unit rate. Multi-family permits increased 22.5% to a 512,000 pace.
Looking at regional permit data on a year-to-date basis, permits are 3.2% higher in the Midwest, 5.4% higher in the South, 6.2% lower in the Northeast, and 1.6% lower in the West.
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