Photo: James Bombales
The US housing market continues to exceed expectations amid the ongoing COVID-19 pandemic. On Tuesday, the Census Bureau released its monthly report on new residential construction for July 2020, posting a 22.6 percent increase in housing starts at a seasonally adjusted annual rate of 1.496 million units.
“Today’s new residential construction report from the Census Bureau showed a stronger-than-anticipated reading for July, as well as upward revisions for May and June,” said Doug Duncan, chief economist at Fannie Mae, in a statement.
New privately-owned housing starts were 4.7 percent higher than the same month last year. When broken down by housing type, single-family starts climbed 8.2 percent above revised June estimates to 940,000 units, while multi-family starts surged 58.4 percent month-over-month to 547,000 units.
Fannie Mae economists believe spring construction delays caused by the onset of the pandemic and subsequent statewide lockdowns likely caused the jump in multi-family starts. “We still expect a comparatively weaker path over the remainder of the year for multifamily construction relative to single-family, as the current list of projects in the planning pipeline runs its course,” continued Duncan.
Building permits, an indicator of future housing starts, rose 9.4 percent over July 2019 to a seasonally adjusted annual rate of 1,495,000. Single-family home permits went up by 17.0 percent from June to July — “the second highest level since 2007,” noted Duncan, who anticipates that construction activity will continue at a brisk pace throughout August.
Housing completions experienced a boost of 3.6 percent month-over-month and 1.7 percent year-over-year to a seasonally adjusted annual rate of 1,280,000. Single-family housing completions, which stood at 909,000, far outpaced completions for units in multi-family buildings at a rate of 364,000.
With mortgage rates expected to remain low and a dwindling supply of existing homes for sale, builders are continuing to feed the nation’s appetite for newly-built residences.