July Housing Numbers Surprise, Confound
July’s new home construction numbers rebounded from June’s disappointment, with a nearly 16% increase over June. Meanwhile, home sales increased to their highest annual pace of the year, which is at least a suggestion that the overall demand for housing – existing and being built – is improving.
However . . . points out Trey Garrison in HousingWire, single-family units rose to 656,000 annually while multifamily units soared 33% in one month, from 318,000 to 423,000. This has multifamily at its highest level since January 2006. Improving, yes, but also changed. While keeping your contractor customers busy, which means more rentals and sales, is always good, it’s apparent the market has changed, with single family not as attractive as in the past and multifamily the current trend.
Permits also rose, notes David Crowe, chief economist for the National Association of Homebuilders, to an annual rate of 1.052 million, up 8.1% from June. Single-family were roughly even and up 3.9% from July 2013. Multifamily increased 21.5% to 412,000. This “confirms the forward momentum in housing construction,” he says. NAHB expects continued improvement through the rest of the year.
Lawrence Yun, National Association of Realtors chief economist says sales momentum is slowing building behind stronger job growth and improving inventory conditions. “More people are buying homes compared to earlier in the year and this trend should continue with interest rates remaining low and apartment rents on the rise.”
An ongoing decline in distressed sales is another positive signal that overall conditions are improving and could set the stage for more construction. Distressed sales were 9% of July’s numbers, down from 15% in July 2013. Distressed sales represented an average of 36% of sales during all of 2009.
Mike Martin
PRO CONTRACTOR RENTALS MAGAZINE
Pro Contractor Rentals provides information of value to rental centers who focus time, resources and attention on meeting the demands of construction contractors and other equipment rental customers.
