Housing starts fell 4% in July to a seasonally adjusted annual rate of 1.191 million and the pace for June was revised downward, according to the Department of Housing and Urban Development and the Department of Commerce, which were cited by Housing Wire.
Single-family starts rose 1.3% from last month to 876,000 units while multifamily starts plunged 17% to 303,000 units, according to the report.
Single-family completions increased 4.3% to a rate of 918,000, while multifamily completions were up 17% to 321,000.
Overall, permits rose 8.4% to a seasonally adjusted annual rate of 1.336 million. Single-family permits increased 1.8% to 838,000 and multifamily permits surged 25% to 453,000.
“A drop in housing starts in July – and a downward revision for the weak June number – show that low mortgage rates are not the catalyst to pull the U.S. homebuilding market out of its slump,” Navy Federal Credit Union Economist Robert Frick said. “A dearth of cheap lots and persistent labor shortages are constraining builders, especially for homes costing less than $300,000, which have the greatest demand.”
“The number of permits issued did rise, but given the demand, it will only have an incremental effect on new homes built down the road,” Frick said. “Especially for first-timers looking to land their first home, the keys remain: Shop aggressively, be willing to settle for a home that needs work, and work with builders to put money down on a home for which ground has yet to be broken, when possible.”