Housing starts were at a seasonally adjusted annual rate of 581,000 units in July, which is 1.0 percent below the June estimate of 587,000 and 37.7 percent below the July 2008 rate of 933,000, the U.S. Commerce Department reported this morning.
Permits for new construction fell 1.8 percent in July to an annual rate of 560,000 from 570,000 units the previous month, and they were 39.4 percent below the July 2008 estimate of 924,000.
The decline in housing starts does not appear to have dampened builder confidence. The NAHB/Wells Fargo Housing Market Index rose one point to its highest level since June 2008, following a two-point gain in July.
NAHB chief economist David Crowe says the index component that gauges home builders’ expectations for the next six months showed a big gain. “This reflects anticipated sales stemming from the [$8,000 first-time homebuyer] tax credit as well as recent signs that an economic recovery has begun. There is definitely a sense of hope among builders that the worst of the downturn is over and that a turning point is near at hand. Meaningful action by Congress could ensure that this upward momentum continues and that housing can help push the economy back onto solid ground,” Crowe says.