Supply chain and labor challenges helped to push overall housing starts down 7 percent to a seasonally adjusted annual rate of 1.53 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
The July reading of 1.53 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months. Within this overall number, single-family starts decreased 4.5 percent to a 1.11 million seasonally adjusted annual rate. The multifamily sector, which includes apartment buildings and condos, decreased 13.1 percent to a 423,000 pace.
"The latest starts numbers reflect declining builder sentiment as they continue to grapple with high building material prices, production bottlenecks and labor shortages," says Chuck Fowke, chairman of the National Association of Home Builders. "Policymakers need to prioritize the U.S. supply chain for items like building materials to ensure builders can add additional inventory the housing market desperately needs."
"The decline in single-family permits indicates that builders are slowing construction activity as costs rise," says Danushka Nanayakkara-Skillington, NAHB assistant vice president of forecasting & analysis. "Starts began the year on a strong footing but in recent months some projects have been forced to pause due to both the availability and costs of materials."
Overall permits increased 2.6 percent to a 1.64 million unit annualized rate in July. Single-family permits decreased 1.7 percent to a 1.05 million unit rate. Multifamily permits increased 11.2 percent to a 587,000 pace.
