Housing Starts July 2007 - Housing Construction Starts At a More-than-10-Year Low in July 

The rate of housing construction starts fell to a more-than-10-year low in July, according to Robert Sheehan, consulting economist for the National Apartment Association.

“What is telling will be that the worst may be yet to come for the ownership housing market as the fallout from the sub-prime residential mortgage market has deepened and broadened to the jumbo mortgage market (mortgages exceeding $417,000),” Sheehan said. “The rental housing market will benefit to some extent from the financing problems for ownership housing as more households will become or stay renters. Many multifamily condos/co-ops, however, have or will become rentals as a result of the financing problems,” he added.

The housing starts rate for July was estimated at a 1.381 million unit seasonally adjusted annual rate, according to the U.S. Department of Commerce, versus a  revised 1.470 million unit rate for June. Single-family construction dropped 7.3 percent to a 1.070 million unit rate from 1.154 million a month earlier. Apartment (units in structures with 5 or more units) declined 2.5 percent to a 275,000 unit rate from 282,000 in June. Total multifamily construction starts were off 1.6 percent to a 311,000 unit rate in July from the 316,000 unit rate a month earlier.

Housing starts were mixed regionally. Starts increased 2.6 percent in the Midwest to a 241,000 unit rate. They fell 11 percent in the South to a 649,000 unit rate. A 4 percent decline occurred in the West to a 334,000 unit rate and 1.3 percent in the Northeast to a 156,000 unit rate.

Building permit activity declined 2.8 percent to a 1.373 million unit annual rate in July from the 1.413 million revised rate for June. Single family permits declined 1.6 percent to a 1.003 million unit rate from 1.019 million. Total multifamily permits were issued at a 370,000 unit rate in July down 6.1 percent from the 394,000 rate in June. Permits for apartments were issued a 314,000 unit rate in July, an 8.2 percent drop from the 342,000 unit rate for June.

Housing starts during the first seven months of this year were down 25 percent to a total of 1.146 million units from the 859,100 units over the same period in 2006. Single-family starts were down 26.9 percent to 692,800 units from 948,200 units a year earlier. Total multifamily starts declined 15.8 percent to 166,200 units from 197,500 units. Apartment construction in the first seven months of this year dropped 13.2 percent to 147,700 units from 170,200 a year ago.

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