New home construction shoots up 22.6% in July

New home construction continues to climb, as privately owned single-family housing starts in July were at a seasonally adjusted annual rate of 1.496 million, a 22.6% jump from June, according to a new report from the U.S. Census Bureau.

Privately owned single-family housing starts showed growth not only over the previous month but the previous year – jumping 23.4% from last July.

“Single-family new home sales in recent months have outpaced their usual relationship to starts,” Fannie Mae Chief Economist Doug Duncan said in a statement. “Homebuilders have supported sales by drawing down existing inventories of homes previously started. An acceleration in new construction was therefore expected in order to rebalance this relationship in light of continued buyer demand.”

Privately owned housing units authorized by building permits in July also continued to rise, at a seasonally adjusted rate of 1.495 million, 18.8% above June’s revised rate.

Single-family authorizations in July were at a rate of 983,000, 17% above the revised June rate of 834,000 units.

“Homebuilders picked up the pace of construction again in July, with both single- and multifamily starts up strongly,” Mortgage Bankers Association Senior Vice President and Chief Economist Mike Fratantoni said in a statement.

“Homebuyer demand remains robust, inventories are tight, and there is a need for new units to keep the pace of sales going,” Fratantoni said. “On another positive note, housing permits were running at an even faster pace in July, indicating that builders will continue to increase production in the months ahead. Housing is certainly one of the bright spots in the struggling economy.”

Privately owned housing completions in July were at a seasonally adjusted annual rate of 1.28 million, 3.6% above the revised June estimate, which was also 4.3% higher than May’s rate.

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