Every cloud has a silver lining and what is happening to single-family housing right now has everyone looking for it. A few glimpses of silver are starting to shine through.
Tuesday’s housing starts report clearly shows that homebuilders are going to be done with single-family construction until mortgage rates fall. Housing completion data is still struggling to get some traction, but in the coming months, builders should be able to get more housing completions done while housing permits and starts for single-family homes are in decline.
If it wasn’t for solid rental demand boosting multifamily construction this year — 18% year to date —this data line would have looked much worse.
CHECK OUT the latest Fed Census report
Privately‐owned housing starts in July were at a seasonally adjusted annual rate of 1,446,000. This is 9.6 percent (±8.6 percent) below the revised June estimate of 1,599,000 and is 8.1 percent (±11.9 percent)* below the July 2021 rate of 1,573,000.
Single‐family housing starts in July were at a rate of 916,000; this is 10.1 percent (±10.8 percent)* below the revised June figure of 1,019,000. The July rate for units in buildings with five units or more was 514,000.
A recession is when total activity falls to a point where production reverses and jobs are lost. For now, the homebuilders will keep labor because they need to finish the homes they have in the pipeline.
However, as new home sales have fallen, the future growth in construction is done until the builders feel comfortable building more single-family starts.
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Gary Fleisher is the Editor in Chief of Modular Home Source and Offsite Builder. Email at [email protected]
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