Single-family housing authorizations rose 6.43% month-over-month in July – a sign that housing activity is advancing in the face of the ongoing pandemic, according to a report by Buildfax, a property condition data service provider.
Despite the slight uptick last month, single-family authorizations are still down 5.25% year-over-year – though the drop was not as great as June, which experienced the steepest year-over-year decline in the past five years.
According to the report, the month-over-month increase may be a result of builders reacting to a future rise in prospective homebuyers while growth in housing activity, despite COVID-19 persistence, indicates underlying consumer demand.
In April, existing housing activity saw its steepest decline when maintenance volume and spend slid 29.09% and 29.71% year over year, respectively.
Maintenance volume also rose 5.6% last month, though spend declined 0.75% year-over-year.
“Housing activity has the potential to return to its early 2020 growth trajectory. Existing housing supply has shown a dramatic bounce back. Maintenance activity, for instance, grew from double-digit declines in April to a healthy increase this month,” said Jonathan Kanarek, managing director of BuildFax.
Additionally, remodel volume – a subset of maintenance that includes renovations, additions, and alterations – increased 2.59% while spend decreased 1.59% year over year.
Last month, Buildfax estimated if single-family authorizations and existing housing activity continue to gain, new construction could stabilize in the Fall. This sentiment is supported by recent data from the National Association of Home Builders that stated residential construction employment rose by 24,000 in July to 2.8 million.
“We’re still seeing some hesitance in the market, including the conflicting signals within new construction and decreases in construction spend. However, growth in new and existing housing activity signify consumers’ underlying need for a larger and healthier housing stock,” Kanarek said.