Multifamily Construction Buoys Housing Data

The pace of residential construction was notably mixed across all three Census Bureau measures in July, with the issuance of permits, housing starts, and housing completions all increasing for multi-family construction enough to offset the decline in the same three measures for single-family construction.

The construction data released by the Bureau jointly with the Department of Housing and Urban Development showed housing starts up by 5.9 percent to a seasonally adjusted annual rate of 896,000 units. This was an increase of 20.9 percent compared to the July 2012 rate of 741,000. The June rate, originally reported at 836,000 was revised upward in the current report to 846,000 units.

Single family housing starts decreased 2.2 percent to 591,000 units from an upwardly revised (from 591,000) June estimate of 604,000 but starts in units with five or more units jumped 25.5 percent to 290,000 units. Single family starts were 15.4 percent higher than a year earlier.

Permits for residential construction increased by 2.7 percent to a seasonally adjusted rate of 943,000 units from the revised rate (down 10,000 units) of 918,000 units in June. The July rate was an increase of 12.4 percent from 839,000 units in July 2012.

Single family permits fell 1.9 percent to 613,000 from a slightly upwardly revised June figure of 625,000. Multifamily permits were issued at a rate of 303,000, a month-over-month jump of 13.5 percent.

Housing completions were at an annual rate of 774,000, 1.8 percent above the upwardly revised June estimate of 760,000, originally reported as 755,000, and 15.0 percent higher than in July 2012 when 673,000 units were completed. Single family completions rose 5.9 percent to 571,000 units while completions of units in buildings with five or more units fell by 5.8 percent to 195,000.

At the end of the reporting period there were 101,600 permits outstanding for which construction had not yet started, slightly over half of which were for single-family dwellings. As seems to be the usual pattern, more than half of that pending construction is located in the South. There were 636,000 units under construction at the end of July, 315,000 of which were single family units.

On a regional basis, permits were up 1.0 percent in the Northeast compared to June and 17,8 percent compared to one year earlier. Housing starts were up 40.2 percent and 30.7 percent respectively. Housing completions, while 15,7 percent higher than in June were down 11.0 percent on an annual basis.

In the Midwest permits rose 2.8 percent month-over-month and 26.3 percent year-over-year. There were 25.4 percent more housing starts than in June and an increase of 36.2 percent from a year earlier. Completions rose 8.6 percent from June but were down 6.0 percent on an annual basis.

Permits in the South were up 1.1 percent from June and 8.4 percent from June 2012 while starts fell 7.0 percent from June but were 14.2 percent higher on an annual basis. Completions decreased by 3.6 percent but remained 20.6 percent above July 2012 levels.

The West saw a 7.1 percent increase in permitting from June to July and 10.3 percent compared to a year earlier. Increases in housing starts for the two periods were 7.2 percent and 19.4 percent respectively and completions were up 3.8 percent and 40.1 percent.