Helped by the first-time home buyer tax credit, housing starts and building permits increased in July. Builder confidence is also strengthening, revealing what many hope is a light at the end of the dark tunnel that has been this year’s housing market. See the following article by HousingWire‘s Austin Kilgore for more on this.
While overall housing starts and completions projections in July are down from their 2008 levels, the rate of single-family housing starts and building permits issued are both up from their June level.
Builder confidence also continues to improve and is at its highest level since June 2008.
The seasonally adjusted annual rate for completions of all housing types was 802,000 in July, according to a report released by the US Census Bureau and the Department of Housing and Urban Development (HUD). This is down 0.9% from the rate in June 2009 and 26.4% below the July 2008 rate. The rate of single-family housing completions in July was 491,000, 4.1% lower than the June 2009 rate.
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While housing completions paint a representative picture of new home inventory entering the market, housing starts and permits provide more of a forecast for new housing inventory in the pipeline. Both indicators edged up in July for the single-family market.
The seasonally adjusted annual rate of all housing starts in July was 581,000, down 1% from June 2009 and 37.7% below the July 2008 rate. The rate of single-family housing starts in July was 490,000, up 1.7% from June. The rate of all housing building permits issued was 560,000, 1.8% below June 2009 and 39.4% below July 2008. Single-family building permits were 5.8% higher than the June 2009 rate of 458,000.
Builder confidence appears to be returning, or at the very least, improving along with the more positive outlook on housing starts and permits. After rising two points in July to 17, The National Association of Home Builders (NAHB)-Wells Fargo Housing Market Index for builder confidence in August was an 18, its highest point since June 2008. Any figure over 50 would indicate that more builders view sales conditions as good than poor.
While August showed a slight improvement, the index remains low. Builders are asked to rate traffic of prospective buyers and about their sales and sales expectations.
“Home builder expectations have been buoyed by the success of the first-time home buyer tax credit and its anticipated boost to buying activity leading up to the Nov. 30 expiration date,” NAHB Chairman Joe Robson, a home builder from Tulsa, Okla., said in a statement. “The question is what happens after that – whether there will be enough momentum to keep us moving toward a recovery?”
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