Supply chain and labor challenges helped to push overall housing starts down 7.0 percent to a seasonally adjusted annual rate of 1.53 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
The July reading of 1.53 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months. Within this overall number, single-family starts decreased 4.5 percent to a 1.11 million seasonally adjusted annual rate. The multifamily sector, which includes apartment buildings and condos, decreased 13.1 percent to a 423,000 pace.
“The latest starts numbers reflect declining builder sentiment as they continue to grapple with high building material prices, production bottlenecks and labor shortages,” said Chuck Fowke, chairman of the National Association of Home Builders (NAHB) and a custom home builder from Tampa, Fla. “Policymakers need to prioritize the U.S. supply chain for items like building materials to ensure builders can add additional inventory the housing market desperately needs.”
“The decline in single-family permits indicates that builders are slowing construction activity as costs rise,” said NAHB Assistant Vice President of Forecasting & Analysis Danushka Nanayakkara-Skillington. “Starts began the year on a strong footing but in recent months some projects have been forced to pause due to both the availability and costs of materials.”
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On a regional and year-to-date basis (January through July of 2021 compared to that same time frame a year ago), combined single-family and multifamily starts are 27.7 percent higher in the Northeast, 20.8 percent higher in the Midwest, 18.5 percent higher in the South and 27.7 percent higher in the West.
Overall permits increased 2.6 percent to a 1.64 million unit annualized rate in July. Single-family permits decreased 1.7 percent to a 1.05 million unit rate. Multifamily permits increased 11.2 percent to a 587,000 pace.
Looking at regional permit data on a year-to-date basis, permits are 24.9 percent higher in the Northeast, 23.0 percent higher in the Midwest, 25.9 percent higher in the South and 28.2 percent higher in the West.Tags: National Association of Home Builders