Homebuilders got busy last month, increasing housing starts by 22.6%, the biggest gain since October of 2016, putting the builders on pace to build 1.496 million homes this year. The Commerce Department also revised last month’s annualized rate higher from 1.186 million homes to 1.22 million. The report blew past the forecast of 1.24 million units.
The construction pace returned to where it was at the start of the year, just before the coronavirus pandemic shut down much of the economy. The rate of housing starts is now just 4.5% below where it was in February. The report showed that housing has recovered nicely and is one of the bright spots in an uneven economy.
The largest increases in homebuilding were in the Northeast, up 35% from June, and the South, up 33% from the prior month. While the overall number was good, it was the surge in multi-family homes, or apartments, up 57% that really drove the market. Single-family housing starts were up 8.2%>
Multi-family projects of five units or more surged by nearly 57% – also the largest increase since October 2016 – while single-family construction rose by just 8.2%.
As for what lies ahead, well, building permits issuance increased in July as well. Permits issuance totaled 1.495 million units at an annualized rate, up 18.8% from 1.258 million in June.