Housing Starts Rise with Builder Confidence
Home buiders' confidence in the single-family new home market edged upward in July after builders started construction on 14.4% more units in June than in May. The US housing construction industry started single-family housing units at an annualized rate of 470,000 units in June, 14.4% more than May's rate, according to a joint release by the US Department of Housing and Urban Development and the Department of Commerce. Single-family home building permits, an indicator of future construction, authorized in June cam in at a seasonally adjusted annual rate of 430,000, 5.9% above May's rate, while the industry completed single-family units at an annual rate of 538,000 units in the month, 8.9% above May's figure. On the heels of these figures, builder confidence in the market for new single-family homes edged upward in July to its highest level since September 2008, although the six-month outlook remained flat, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The HMI, composed of three calculations, posted a slight rise in builder confidence in current sales conditions, while confidence in traffic of prospective buyers inched upward. Meanwhile, the element of the HPI gauging sales expectations for the next six months remained flat for the fourth consecutive month. “Builders recognize the recovery is going to be a slow one and that we are facing a number of substantial negative forces,” said NAHB chief economist David Crowe. The South posted the largest HMI gain as confidence remains strong in the region, while the Northeast slipped and the Midwest and West remained flat. “A true recovery in the housing market and overall economy cannot take place until the continuing foreclosure crisis is abated and a decent flow of credit is restored to housing production," said NAHB chairman Joe Robson. "Meanwhile, the stalled jobs market is a major concern to builders and potential home buyers alike.” Write to Diana Golobay.