Nationwide
housing starts edged down 1.5 percent to a seasonally adjusted annual rate of
604,000 units in July, while the June BuildFax Remodeling Index reported its highest remodeling numbers in 20 months.
Nationwide
housing starts edged down 1.5 percent to a seasonally adjusted annual rate of
604,000 units in July, according to figures released by the
U.S. Commerce Department today. The
slight decline comes on the heels of significant gains in housing production in
June and was attributable to a moderate drop-off on the single-family side
while production of multifamily units continued upward.
Single-family
housing starts declined 4.9 percent to a seasonally adjusted annual rate of
425,000 units in July, on par with their second-quarter average. Multifamily
starts rose 7.8 percent to a seasonally adjusted annual rate of 179,000 units,
their highest level since January. Issuance of building permits, which can be
an indicator of future building activity, fell 3.2 percent to a seasonally
adjusted annual rate of 597,000 units in July.
“Overall
housing production held relatively steady in July, with construction of new
multifamily projects showing greater strength due to higher demand for rental
units,” noted
David Crowe, chief economist for the
National Association of Home Builders. “Going
forward, we expect housing production to show modest improvement through the
end of this year, particularly in select markets that do not have large
inventories of distressed homes and where economic stability is more apparent.”
Starts
activity was mixed across the four regions in July, with the Northeast’s 34.7
percent gain countered by a 37.7 percent decline in the Midwest, a 5.6 percent
gain reported in the South and a 3 percent decline posted in the West.
The
NAHB/Wells Fargo
Housing Market Index for August indicated that builder confidence in
the market for newly built, single-family homes is unchanged from the previous
month.
“Builders
continue to confront the same major challenges they have seen over the past
year, including competition from the large inventory of distressed homes on the
market, inaccurate appraisal values, and issues with their buyers not being
able to sell an existing home or qualify for favorable mortgage rates because
of overly tight underwriting requirements,” said
Bob Nielsen,
NAHB chairman and a home builder from Reno, Nev. He noted that 41 percent of
respondents to a special questions section of the HMI indicated they had lost
sales contracts due to buyers’ inability to sell their current homes.
Remodeling Reaches Record Levels In June
Even
as the economy continues to struggle and home sales sag, the remodeling industry
continued to be a bright spot in June, according to
BuildFax, which tracks building,
remodeling and repair data on more than 70 million homes nationwide. The BuildFax
Remodeling Index shows that June 2011 became the month with the highest level
of remodeling activity since the index was introduced in 2004.
“The
first half of 2011 brought pain to many sectors of the economy including home
sales and jobs, however Americans continue to invest in remodeling,” said
Joe
Emison, vice president of research and development at
BuildFax. “With so many Americans unable to sell their current home, it is
apparent that they are planning on staying in their current residences and are
making renovations and upgrades.”
The
June 2011 index rose 23 percent year-over-year to 129.5, the highest number
ever in the index to date. The West (7.3 points; 6 percent), the Midwest (11.2 points; 13 percent), and the South (<.1
points; <1 percent) all had month-over-month gains, while the Northeast saw
a decline (3.7 points; 4 percent). However, the Northeast was up 1.6
points (2 percent) from June of 2010, as was the West (24.4 points; 24 percent)
and the South (7.6 points; 8 percent). The Midwest
was down slightly year-over-year (1 point; 1 percent), but much less so than the
previous month (10.6 points; 11 percent).
