By Martin Crutsinger
AP Economics Writer
WASHINGTON (AP) — Home construction fell a sharp 7% in July as homebuilders struggled to cope with a variety of headwinds.
The July decline put home construction at a seasonally adjusted annual rate of 1.53 million units, the Commerce Department reported Wednesday. It was the slowest pace since April but was 2.5% higher than a year ago.
Applications for building permits, which can forecast future activity, rose 2.6% in July from the June level to an annual rate of 1.64 million units. It was the first monthly increase in permit applications since March.
Construction starts for single-family homes fell 4.9% in July to an annual rate of 1.11 million while construction of apartments of five units or more dropped 13.6% to a rate of 412,000 units.
Home construction was down in every part of the country except the South where housing starts rose 2.1%. The biggest decline was in the Northeast, a drop of 49.3%, followed by declines of 11.3% in the West and 6.9% in the Midwest.
According to a survey of builder confidence, expectations fell sharply in August to the lowest level in a year as builders struggled with high costs, supply shortages and rising home prices. Expectations dropped five points to a reading of 75 in the National Association of Home Builders/Wells Fargo survey.
While the peak of the housing frenzy may be past, economists believe strong demand will continue to drive the market.
"Housing demand and sparse inventory will give builders strong reasons to maintain solid levels of construction," said Oren Klachkin, lead U.S. economist at Oxford Economics. "However, high materials prices, a limited supply of workers and limited land availability will constrain activity."
Also on Wednesday, the Mortgage Bankers Association reported that mortgage applications fell 3.9% last week to their lowest level in a month, reflecting a drop in refinancing applications as mortgage interest rates rose.
- Posted August 20, 2021
- Tweet This | Share on Facebook
Housing construction slumps 7% in July to 1.53 million units
headlines Oakland County
- Annual Dinner & Meeting
- FORCE Team arrests six in prolific auto theft ring
- Michigan allocates $12 million to support community-based organizations in advancing environmental and climate justice
- Oakland County and SMART launch pilot program providing free transit for veterans and dependents
- Supreme Court sides with the Consumer Financial Protection Bureau
headlines National
- More lawyers—and clients—want to learn about sustainable development practices
- Top artificial intelligence insurance tips for lawyers
- Lawyer charged with illegally transmitting Michigan data after 2020 election
- Viral video shows former Rikers Island inmate as she learns she passed bar exam on first try
- How Sullivan & Cromwell is scrutinizing potential new hires after campus protests
- No separate hearing required when police seize cars loaned to drivers accused of drug crimes, SCOTUS rules