By Peter Ricci
Housing starts in July were up 21.5 percent from last year, according to the latest joint report from the U.S. Census Bureau and the Department of Housing and Urban Development.
Additionally, building permits, which are the clearest signal for future construction activity, rose 6.8 percent from June to July and 29.5 percent from July 2011 to a seasonally adjusted annual rate of 812,000, the highest level since 2008.
Housing Construction Data
In addition, the Census Bureau also reported:
- Single-family authorizations were also up by 4.5 percent from June, a great sign for future single-family home construction.
- Housing completions were similarly positive, rising 7.1 percent from June and 5.4 percent from July 2011 to a seasonally adjusted annual rate of 668,000.
- Single-family completions, though, were down a bit from June, dropping from 476,000 to 448,000.
- Housing starts were also down slightly from June, falling 1.1 percent.
Year-over-year Housing Starts are Key
As Bill McBride explained on Calculated Risk, even with the monthly declines, housing construction (particularly housing starts) is still up substantially from a year before, following the big declines in the post-boom housing market and the sideways movement of the last 2+ years.
Indeed, housing starts are up 56 percent from the bottom rate, and single-family starts are up 42 percent. At their current rate, housing starts will show a 20 percent increase over 2011.
Jed Kolko, the chief economist at Trulia, also highlighted the positives of the Census Bureau’s latest report, spotlighting: housing starts, despite their monthly increase, are still higher than at any time since October 2008; three of the past four months – April, June and July – saw housing starts data in excess of 750,000, which is a huge increase from the 609,000 and 587,000 averages that were seen in 2011 and 2010; overall, housing construction is halfway to paradise – the pre-bubble average for new housing starts was 1.5 million a year.
So though housing construction still has room to improve, it’s getting there!