WASHINGTON, D.C. – The American housing market may have stopped to take a breather in the month of July. Coming off an 11 per cent rise in June, the market stayed more or less flat in July, shedding one per cent to 581,000 units on a seasonally adjusted annualized basis. The news is being perceived as slightly disappointing given that analysts had predicted starts would rise by about two per cent to 600,000 units.
Multi-family starts weighed down the pace of construction, falling 13 per cent from a month earlier. Single-family starts meanwhile, which account for roughly three-quarters of the total US housing market, rose for a fifth straight month, this time by one per cent. They are now at the highest level they’ve been since October of 2008.
To put things in perspective, however, July's housing data was 38 per cent below where it was this time last year. So while the news is good, the industry is still a long way from pre-recession levels.
Applications for building permits, which are an indicator of future activity, also disappointed, falling 1.8 per cent to an annual rate of 560,000 units. Expectations were for this figure to be around an annual rate of 580,000 units.
Looking ahead, the ever-growing unemployment ranks and the pending expiration of the ten per cent federal tax credit for first-time home buyers look like ominous obstacles on the horizon.