By Kevin Kastner
WASHINGTON (MaceNews) – The U.S. July home building data, released Tuesday, were much stronger than expected and show that the record low mortgage rates are encouraging an increase in supply to meet the demand for new homes.
The pace of housing starts rose by 22.6% to a 1.496 million annual rate, well above the 1.240 million pace expected, the Commerce Department reported.. Single-family starts rose by 8.2%, while multi-family starts jumped by 58.4% despite recent trends.
Surveys over the last few months have shown a shift in homeowner sentiment toward living in standalone homes rather than apartments and condominiums in the post-COVID world.
Building permits, which precede starts activity, rose by 18.8% to a 1.495 million pace, with single-family permits up 17.0% and multi-family permits up 22.5%. The July permits gain suggests a further surge in the pace of housing starts is likely for August.
Homes under construction rose by 1.3% to a 1.181 million rate in July, while completions rose by 3.6% to a 1.280 million rate, suggesting a surge in supply of new homes available for sale.
As strong as the July data were, there are signs that home building activity could accelerate even further.
Released on Monday, the National Association of Home Builders sentiment index rose to 78 in August from 72 in July, equaling its record high last hit in December 1998. Measures of both current and future activity rose solidly.
Additionally, the Mortgage Bankers Association’s weekly activity reading continues to show strong mortgage applications and record low mortgage rates.
Unlike the housing sector, retail same-store sales are still showing signs of a COVID impact.
Released later Tuesday, Redbook’s weekly same-store sales measure fell by 2.8% in the August 15 week from the same week a year earlier. August sales to this point are up 2.8% from July, but still down 3.1% from August 2019.
Redbook said that back-to-school sales have softer than expected, due in large part to many states starting the year with virtual learning. The timing of school starts is also more dispersed than normal, so sales are not concentrated in the same weeks as normal.
Redbook said that retailers are hoping for further Federal Government stimulus to put spending money into the hands of consumers.
—
Contact this reporter: kevin@macenews.com.
Content may appear first or exclusively on the Mace News premium service. For real-time email delivery contact tony@macenews.com. Twitter headlines @macenewsmacro.