Takeaways:
- Single-family housing starts are predicted to accelerate as 2015 closes out.
- Single-family spending jumped by double digits.
- Multifamily project starts appear to be gradually slowing.
Single-family housing construction was the leading driver of total private residential construction spending in July.
On a month-over-month basis, private single-family spending reached $218 billion, up by 2.1 percent over the June estimate and up 15.8 percent year over year.
Total private residential spending in July increased to a seasonally adjusted annual rate of nearly $381 billion — a 15.6 percent year-over-year rise.
That $381 billion represents nearly 50 percent (48.3 percent) of all total private construction spending in the U.S. — which reached $788 billion in July, according to U.S. Census data.
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According to the insight from the National Association of Home Builders (NAHB), single-family spending will accelerate through the remainder of this year.
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In July, single-family starts rose by 12.9 percent to a seasonally adjusted rate of 782,000 — the highest level since October 2007, a separate NAHB/Well Fargo Housing Market Index stated. The index also found that the average time to complete a home stands at roughly seven months.
“Our builders are reporting more confidence in the market, and are stepping up production of single-family homes as a result,” said Tom Wood, chairman of NAHB.
Another recent report, this one by BuildFax, suggests that while starts may be up, the volume of building permits pulled was down in July.
“Residential new construction hit a seasonally adjusted annual rate of 1,212,206 permits in July,” BuildFax said. BuildFax reports on total new residential projects, unlike the U.S. Census, which reports the total number of housing units.
BuildFax found new construction activity dropped in three of four regions on a month-to-month basis. Only the West saw an increase. Year over year, two of four regions were up from July 2014: the West and Northeast.
The multifamily sector also contributed to the overall volume of residential spending. That sector has seen a 21.2 percent gain in spending year over year.
However, the sector did see a 2.2 percent drop in spending from June to July. This drop follows three months of consecutive gains. The NAHB said this was a sign that the pace of multifamily construction is gradually slowing.