Housing starts jumped in July, surging 22.6% compared with June to a seasonally adjusted annual rate of 1.496 million, according to estimates from the U.S. Census Bureau and U.S. Department of Housing and Urban Development.
What’s more, housing starts were up 23.4% compared with July 2019.
Starts of single-family homes were at a rate of 940,000, an increase of 8.2% compared with 869,000 in June.
Starts of multifamily homes (five units or more per building) were at a rate of 547,000, an increase of 56.7% compared with 349,000 in June.
Building permits also saw a significant increase in July, rising 18.8% compared with June to a seasonally adjusted annual rate of 1.495 million.
That’s an increase of 9.4% compared with 1.366 million in July 2019.
Permits for single-family homes were at a rate of 983,000, an increase of 17.0% compared with 840,000 in June. Permits for multifamily dwellings were at a rate of 467,000, an increase of 23.5% compared with 378,000 in June.
Housing completions were also up month-over-month and year-over-year.
“July’s housing starts report reveals the rebound in building continues as builders are responding to surging demand in an environment of limited existing homes available for sale,” says Odeta Kushi, deputy chief economist for First American, in a statement. “The year-over-year increase in permits, starts, and completions indicates that builders are eagerly responding to record low mortgage rates, a limited supply of existing homes for sale, and sturdy demand driven by millennials aging into homeownership, but rising material costs may dampen that momentum in the months to come.”
Kushi notes that the National Association of Home Builders’ most recent homebuilder confidence survey “posted its highest level ever recorded in its 35-year history. Of the index’s three components, buyer traffic increased the most, also hitting a record level.”
Builders, however, continue to face significant headwinds, including the ongoing impact of the pandemic and surging lumber prices, “which have more than doubled since April.”