Housing Starts Increase for 4th Month in a Row
The housing industry continued its slow but steady recovery in July, with construction of new homes and apartments rising for the fourth straight month, the Commerce Department said Thursday.
Analysts said the fourth consecutive monthly increase confirmed that the gradual revival in the housing industry was continuing.
Housing starts rose 3.7% last month to a seasonally adjusted annual rate of 1.07 million units after revised gains of 5% in June and 0.6% in May. Starts rose 7.7% in April.
“It’s indicating that the housing sector recovery is still on track,” said Thomas Holloway, an economist with the Mortgage Bankers Assn.
“It’s great to have a recovery, but this is not a really robust one,” said Dave Seiders, chief economist for the National Assn. of Home Builders.
Nevertheless, the last time housing starts rose for four straight months was more than a decade ago, from July to October, 1980. New construction has also increased in five of the six months since the housing recession bottomed out in January.
The Commerce Department housing report said increases in housing starts were concentrated in the South and West, while the Northeast and Midwest lost some of their June gains.
New construction nationally totaled a seasonally adjusted annual rate of 1.07 million, up from 1.03 million a month earlier. But the revised June increase was weaker than the 1.04 million rate first estimated last month.
Still, the construction rate through July was 22.6% below that of the first seven months of 1990, and 30% below that of the same period of 1989.
Seiders said the housing revival would be the weakest since 1.015 million units were built in 1946 and would provide just half the boost it averaged during previous economic recoveries since World War II.
Applications for building permits--a barometer of future activity--rose for the sixth straight month, the first time that has happened since February-July, 1983. But the 0.3% gain, to a 1-million rate, also supported forecasts of a weak housing recovery.
Construction of new homes and apartments continued to rise for the fourth straight month.
July ’90: 1.16
June ’91: 1.03
July ’91: 1.07
Source: Commerce Department