New-home construction in the U.S. fell in July, while the number
of building permits jumped to the highest level in four years, indicating the
industry will keep improving in the second half of the year.
Starts fell 1.1 percent to a 746,000 annual rate from June’s
754,000 pace says the Commerce Department. Building permits, a proxy for future
construction, rose to an 812,000 pace, the most since August 2008.
Construction of single-family houses fell 6.5 percent to a
502,000 rate, the first decline since February. The modular housing segment usually accounts for 3% of that total and represents 15,000 homes. We still have a long way to go folks! Can you imagine the number of factory jobs that would be created if we got that number to 10%!
Work on multifamily homes, such as townhouses and apartment
buildings, rose 12 percent to an annual rate of 244,000, a five- month high.
This is one area that modular construction seems to be taking hold. I’m hearing developers are now requesting quotes from modular factories in addition to their normal site built contractors.
“The multifamily
sector is on fire, and we expect that will continue to be the case for the next
few quarters,” Richard Moody, chief economist at Regions Financial Corp. in
Birmingham, Alabama said. “The recovery in single- family construction remains uneven across
markets.”
Three of four regions showed a decline, led by a 5.3 percent
decrease in the West. That region also showed the biggest jump in permits,
climbing 14 percent in July, taking them to the highest level since June 2008.
Building applications in the West soared 54 percent over the
past 12 months, the biggest year-to-year jump since December 1986.
