Steel Markets

NAHB: Housing Starts Flat in July

August 16, 2018

Housing data was mostly flat in July with housing starts up just 0.9 percent to a seasonally adjusted annual rate of 1,168,000 units. Data from HUD and Commerce show single-family housing starts increasing 0.9 percent and multifamily housing 3.1 percent.

Regionally, housing starts fared better in the Midwest and South, increasing 11.6 percent and 10.4 percent, respectively. Starts fell 19.6 percent in the West and were down 4.0 percent in the Northeast.

“Builder confidence remains solid, although it has fallen back somewhat in recent months due to rising construction costs in 2018, including lumber,” said National Association of Home Builders Chairman Randy Noel. “As builders grapple with higher costs, one positive development is that lumber prices have shown signs of easing in the past two months off their record high levels posted in June,” he said.

Building permits, a predictor of future construction, rose 1.5 percent from June to a SAAR of 1,311,000. The July rate exceeded the year-ago level by 4.2 percent. Single-family and multifamily housing both made gains last month, increasing 1.9 percent and 1.7 percent, respectively.

Permits rose 5.9 percent in the Northeast, 5.8 percent in the Midwest and 1.2 percent in the West. Permit authorizations in the South were essentially flat, declining 0.3 percent.

“Supply-side challenges, including increases in material prices and chronic labor shortages, are affecting affordability in many markets,” said NAHB Chief Economist Robert Dietz.

“However, consumer demand remains strong due to a growing economy and job market and favorable demographics. Moreover, on a year-to-date basis, single-family construction has shown steady progress, up 7.2 percent, while 5+ multifamily production is up 3.4 percent, as well.”