New home construction rebounds in July but future plans stall
Summary
In July, U.S. builders began constructing new homes at the fastest pace in five months, mainly driven by multifamily housing projects. However, the number of permits issued for future home construction dropped to the lowest level since 2020. This indicates that while current building activity increased, there is uncertainty about future housing projects.Key Facts
- New home construction in the U.S. increased by over 5% in July.
- The construction rate reached an annualized pace of 1.4 million homes.
- Multifamily housing saw a 10% increase in starts, contributing to overall growth.
- Single-family home construction rose by approximately 2%.
- Building permits for future construction fell by almost 3% in July, reaching an annualized rate of 1.35 million.
- Current building permits are about 6% lower than the same time last year.
- High interest rates and rising material costs are making builders cautious.
- The housing sector has negatively impacted broader economic growth recently.
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