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Housing Starts Decline Another 7% to a Level Below the Pre-Pandemic Peak

Housing starts unexpectedly declined 7% in July missing estimates in three consecutive months.
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Housing Starts, Permits, Completions 2021-07 Detail

The New Residential Construction Report for July shows another bad month for housing.

Building Permits 

  • Privately‐owned housing units authorized by building permits in July were at a seasonally adjusted annual rate of 1,635,000. This is 2.6 percent above the revised June rate of 1,594,000 and is 6.0 percent above the July 2020 rate of 1,542,000.
  • Single‐family authorizations in July were at a rate of 1,048,000; this is 1.7 percent below the revised June figure of 1,066,000. 
  • Authorizations of units in buildings with five units or more were at a rate of 532,000 in July. 

Housing Starts 

  • Privately‐owned housing starts in July were at a seasonally adjusted annual rate of 1,534,000. This is 7.0 percent below the revised June estimate of 1,650,000, but is 2.5 percent  above the July 2020 rate of 1,497,000.
  • Single‐family housing starts in July were at a rate of 1,111,000; this is 4.5 percent  below the revised June figure of 1,163,000. 
  • The July rate for units in buildings with five units or more was 412,000. 

Housing Completions 

  • Privately‐owned housing completions in July were at a seasonally adjusted annual rate of 1,391,000. This is 5.6 percent (above the revised June estimate of 1,317,000 and is 3.8 percent  above the July 2020 rate of 1,340,000. 
  • Single‐family housing completions in July were at a rate of 954,000; this is 3.6 percent above the revised June rate of 921,000. 
  • The July rate for units in buildings with five units or more was 426,000.

Seasonal Adjustments

Seasonally-adjusted Census Bureau reporting by percentages dramatically distorts what's really going on. 

The month-to-month seasonal adjustments are huge, Covid and the rebound remains a big factor and weather enters into play.  

Unadjusted there were 139,600 starts, which seasonally-adjusted and annualized  translated to 1,534,000 starts

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Starts vs Pre-Pandemic Level

Longer-term the lead chart provides a better frame of reference for the pandemic.

Housing starts were at a seasonally-adjusted annualized rate of 1,589,000 in February of 2020. In July of 2021, starts are below that level and are now at a rate of 1,534,000.

 Long-Term Perspective

Housing Starts 1959-Present 2021-07

There was a very strong rebound from the housing bubble bust, a huge covid decline, then an even bigger covid rebound. 

After all that, it looks as if we are close to the long-term average. A quick check shows the SAAR average since January 1959 is 1,430,000.

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