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August 24, 2014

Housing starts up 15.7% in July

Aug. 20, 2014 – Privately owned housing starts – homes on which construction has begun – went up by 15.7 percent in July, making that month's pace the highest since November 2013.

NAFCU Staff Economist Doug Christman analyzed data from the Census Bureau, and found that the surge brought July starts data to a seasonally adjusted annual rate of 1.1 million units – a 21.7 percent increase from a year before.

"Improvements in July's housing starts data suggests a strengthening housing market after sluggish sales in the first half of the year," Christman said. "Greater demand and improvements in the labor market should help drive a rebound in the housing market throughout the year and into 2015. An improving housing market will help drive broader growth in the economy."

Christman also found that rising demand for rental housing helped drive investment in multi-family units – often apartment buildings – which led to an increase of 33 percent month to month in multi-family unit starts. Single-family unit starts increased by 8.3 percent.

Building permits also increased by 8.1 percent to a seasonally adjusted annual rate of 1.05 million units – a predictor of future construction.

The strongest growth in starts was seen in the Northeast with a 44 percent increase in July. Starts also increased in the South and West, but decreased by 24.8 percent in the Midwest.