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Permits Up Strongly as Housing's Recovery Takes Hold
August, 2012
Starts were down In July due to sagging single-family activity.
By: Claire Easley
"The market for new construction is back on track."
That's the analysis from Patrick Newport, U.S. economist at HIS Global Insight,
in response to the latest report on new-housing starts and permits from the U.S.
Department of Commerce, released today.
Permits were up 6.8% in July, hitting an annual rate of 812.000, the best reading
the industry has seen since August 2008. Single-family permits were up 4.5% for
an annual rate of 513,000, and multifamily permits sprang up 11.2% for an annual
rate of 299,000.
Housing starts moved down 1.1% in July, hitting an annual rate of 746,000, due to
a 6.5% decline in single-family activity. Multifamily starts were up 12.4% for the
month. However, "since housing starts tend to follow housing permits with a small
lag, July's decline in starts is nothing to worry about, "Newport said.
"The recovery is mainly taking place in the South and West, with the multifamily
segment coming back faster than the single-family segment, "he said, but added that
the pickup has thus far been sluggish and is expected to remain so for about another
year. "Eventually, provided the economic recovery remains on track, the demographics
will start to kick in—household formation will accelerate…and many young adults
now living either parents will start moving out." As for when the industry can expect
starts to top the 1.5 million mark, Newport's prediction is 2015.