Housing Starts near 8 Year High While Multi-Fam Skews Permits

Permits for residential construction fell sharply in July,rndown 16.3 percent from June while remaining 7.5 percent above the level of one yearrnearlier.  The U.S. Census Bureau andrnDepartment of Housing and Urban Development’s joint release said permits werernissued at a seasonally adjusted annual rate of 1,119,000 compared to a revisedrnJune rate of 1,337,000, up from the original estimate of 1,343,000 units and arnrate of 1,041,000 in July 2014.</p

The decline in permitting, while affecting all four regions,rnwas driven by a 60.2 percent slide in the Northeast. Bloomberg said a change inrnreal estate law caused permits in New York to be pulled forward into June,rndiminishing July’s numbers.  The decline put permits well below the median forecast of 1.232 million.</p

Away from multi-family, the numbers weren’t nearly as bad.  Permits were issued for single-family construction at a raternof 679,000 units, a 1.9 percent decrease from the revised June figure ofrn692,000 (from 687,000 units) and for 412,000 annual units of multi-familyrnconstruction, a 32.6 percent drop from June. The decline in multi-familyrnpermits appear to also be driven by events in the Northeast.</p

On a non-adjusted basis there were 100,900 permits issuedrnnationally compared to 134,100 in June. rnSingle family permits fell by over 5,000 to 64,700.</p

Housing starts rose 0.2 percent to a seasonally adjustedrnannual rate of 1,206,000 from a substantially revised June estimate ofrn1,204,000.  That makes this month and last month the best since late 2007 for Starts, though still a mere shadow of the 10yrs before that.  The original June estimate ofrnwas 1,174,000.  The July number was 10.1rnpercent higher than the July 2014 rate of 1,095,000 units.  Analysts had been looking for an average ofrn1.180 million starts.</p

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Single family starts increased by 12.8 percent from June’srnrate of 693,000 (revised from 685,000) to 782,000.  This was an increase of 19.0 percent from thernprevious year.  Construction was begun onrnmulti-family units at an annual rate of 413,000, down 17.1 percent from Junernand 2.1 percent from July 2014.</p

Housing starts totaled 112,300 on an unadjusted basis forrnthe month, virtually unchanged from June. rnSingle family starts however rose from 69,900 to 74,100.</p

Residential units were completed (another metric in this report is “Housing Completions”) at a seasonally adjustedrnannual rate of 987,000, a 2.4 percent gain over the 964,000 (revised fromrn972,000) unit rate in June and 14.6 percent more than a year earlier.  </p

Single family housing completions were at an annual rate ofrn627,000, down 1.4 percent from the previous month and 0.5 percentrnyear-over-year.  Multifamily completionsrnrose 9.7 percent from June to a rate of 350,000, an annual jump of 56.3rnpercent.</p

There were 85,800 residential units completed in July.  Single-family completions numbered 51,100.</p

On a regional basis, the 60.2 percent drop in permitting inrnthe Northeast put the region down 5.0 percent from the July 2014 pace. Startsrnalso fell, down 27.5 percent from June but remaining 15.8 percent higher than arnyear earlier.  Housing completions jumpedrn36.1 percent compared to the previous month and were up 5.4 percentrnyear-over-year.</p

In the Midwest permitting was down 4.6 percent from June andrn2.0 percent from a year earlier.  Housingrnstarts rose 20.1 percent and 10.5 percent from the two earlier periods andrncompletions were up by 12.2 percent and 9.9 percent respectively. </p

The South saw a decrease of 1.7 percent in the rate ofrnpermitting compared to June but a 12.7 percent gain from a year earlier.  Starts rose 7.7 percent from June and 11.6rnpercent from July 2014 while completions slid 2.7 percent on a monthly basisrnbut were 18.7 percent above those the previous July.</p

Permitting in the West was down 9.9 percent month-over-monthrnbut reflected an annual increase of 10.9 percent.  Housing starts eased back by 3.1 percent fromrnJune but were 4.1 percent higher than in July 2014. Completions were down 3.2rnpercent for the month and up 13.6 percent for the year.</p

At the end of the reporting period there were an estimatedrn908,000 residential units under construction but only 389,000 werernsingle-family dwellings.  There werern507,000 units of multi-family construction underway.  Outstanding permits under which constructionrnhad not started at the end of the period numbered 144,000.  The permits were for 61,000 single-family andrn81,000 multifamily units.

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