Housing starts soar 22.6% in July

Home-building activity has staged a significant turnaround from the coronavirus-related slowdown.
U.S. home builders began construction on homes at a seasonally-adjusted annual rate of 1.496 million in July, up 22.6% from the previous month and 23.4% from a year ago, the U.S. Census Bureau reported Tuesday. The pace of home building is now 7% down from the pre-coronavirus high.

Permitting activity occurred at a seasonally-adjusted annual rate of 1.495 million, up 18.8% from June and 9.4% from July 2019.

Economists polled by MarketWatch had expected housing starts to occur at a pace of 1.252 million and building permits to come in at a pace of 1.33 million.

Increases in both single-family and multifamily starts contributed to the overall increase. Construction on buildings with five or more units increased 56.7% on a monthly basis, while single-family starts rose 8.2%.

Likewise, the increase in building permits occurred across all types of housing: one-unit homes (up 17%), homes with between two and four units (up 12.5%) and buildings with five or more units (up 23.5%).

“The gap between permitted homes and started homes continues to grow,” said Danielle Hale, chief economist at Realtor.com. “This growing gap signals extra capacity on the permit side, but may mean that despite record confidence, builders have trouble completing jobs.”

July single-family home completions were down 1.8% from June and 0.4% from a year ago.

All regions experienced an overall uptick in housing starts despite rising coronavirus cases across many parts of the country, led by the 35.3% increase in the Northeast. However, single-family starts actually fell slightly between June and July in both the Northeast and the Midwest. Permitting rose relatively uniformly across the country, with all four major regions seeing upticks.