Building Permits, Housing Starts Skyrocket in July, Crushing Forecasts

New Residential Construction Rebounds Strongly, Further Indicates V-Shaped Recovery

Washington, D.C. (PPD) — New residential construction statistics for housing starts and building permits skyrocketed in July, despite lingering effects due to coronavirus (COVID-19). Many governments and businesses are operating on a limited capacity or have ceased operations completely.

The new residential construction statistics report below is released jointly by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development (HUD).

Building Permits

Privately-owned housing units authorized by building permits came in at a seasonally adjusted annual rate of 1,495,000 in July. That’s 18.8% (±1.1%) above the revised June rate of 1,258,000 and 9.4% (±1.5%) above the July 2019 rate of 1,366,000.

Forecasts ranged from a low of 1,200,000 to a high of 1,380,000. The consensus forecast was 1,300,000.

Single-family authorizations came in at a rate of 983,000, which is 17.0% (±1.2%) higher than the revised June figure of 840,000. Authorizations of units in buildings with five units or more were at a rate of 467,000 in July.

Housing Starts

Privately-owned housing starts came in at a seasonally adjusted annual rate of 1,496,000. That’s 22.6% (±14.7%) above the revised June estimate of 1,220,000 and is 23.4% (±12.4%) higher than the July 2019 rate of 1,212,000.

Single-family housing starts came in at a rate of 940,000, or 8.2% (±10.3%) higher than the revised June figure of 869,000. The July rate for units in buildings with five units or more was 547,000.

Forecasts ranged from a low of 1,169,000 to a high of 1,320,000. The consensus forecast was 1,240,000.

Housing Completions

Privately-owned housing completions came in at a seasonally adjusted annual rate of 1,280,000. That’s 3.6% (±14.9%) higher from the revised June estimate of 1,236,000 and 1.7% (±12.8%) above the July 2019 rate of 1,258,000.

Single-family housing completions came in at a rate of 909,000, or 1.8% (±16.8%) below the revised June rate of 926,000. The July rate for units in buildings with five units or more was 364,000.

There’s no consensus forecast published for housing completions.

Housing Primed to Lead Economic Recovery

On Monday, the NAHB Housing Market Index (HMI) reported builder confidence unexpectedly rose another 6 points to 78 in August, matching the all-time high and beating the consensus forecast. A reading above 50 indicates a positive housing market for new single-family dwellings.

New home sales soared 13.8% (±17.8%) to a seasonally adjusted annual rate of 776,000 in June, easily beating the consensus forecast. That’s the highest level for new home sales since before the Great Recession, or July 2007.

The month of May was revised up from 672,000 to a rate of 682,000, despite the coronavirus (COVID-19) impact when most businesses and government were operating on a limited capacity or had ceased operations totally. New home sales have shown little impact due to the pandemic response and are now 6.9% (±13.7%) higher than the June 2019 estimate of 726,000.

Pending home sales surged more than three times the consensus forecast by 16.6% in June, after soaring a record 44.3% in May. As a result of the stronger-than-expected recovery and growth in housing, the National Association of Realtors (NAR) raised its forecast for the market.