July Housing Starts: Still Languishing

• Housing starts in July dropped 4% from June to a seasonally adjusted annual rate of 1.19 million, according to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development. That’s 0.6% above July 2018. Single‐family housing starts in July climbed 1.3% from June to 876,000 (SAAR), a 1.9% boost from a year earlier.
• Building permits in July rose 8.4% from June to 1.34 million (SAAR). That’s 1.5% above July 2018.
• Housing completions in July were up 7.2% from June to 1.25 million (SAAR), which was 6.3% higher than a year earlier.

This monthly decline isn’t the first indication that the housing market is flagging. Construction has languished all year — with starts down 3.6% for the first seven months of the year compared to a year earlier.

Scarce land and high labor costs have plagued builders for much of the year, factors that have been exacerbated by unrelenting uncertainty in the global markets. This week's flare-up, with bond markets flashing recession warnings, does not provide fertile ground for new housing investment.

Consumers stand ready to snap up new homes, particularly at the entry level, and mortgage rates are cooperating — but new construction is not. That could change, given the lift in July housing permits, which was higher than expected.

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