The construction of single-family homes seems to have dropped, but the number of permits issued has increased.
Issuance of permits for single-family residences in July showed a 4.5 percent increase from the revised June figure, statistics released by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development shows.
Construction of single-family homes dropped by 6.5 percent. Also, single-family housing completions in July decreased by 5.9 percent from the revised June rate of 476,000, the statistics showed.
Issuance of permits is an indicator of how the housing market will fare in coming months, and the increase indicates a bright future.
On the whole, the housing market seems to be increasing at a moderate pace. The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index showed that for the fourth consecutive month builders’ confidence in the market for newly built, single family homes improved. The HMI increased from 35 to 37 in August, the highest since February 2007.
The HMI index showed positive outlook for current sales condition, traffic of prospective buyers’ sales expectations in the next six months.
Meanwhile, experts believe that a slight setback in construction activities does not hamper the upward trend of housing market. Dan Greenhaus, chief global strategist at BTIG in New York, told The Los Angeles Times that from a year ago, construction of single-family homes is up by 17 percent.
Barry Rutenberg, chairman of the NAHB, also agrees that the outlook for housing is considerably brighter than it has been in years.
“While many builders believe that the outlook for housing is considerably brighter than it has been in years, we are being very careful about keeping inventories tight and not building ahead of demand,” Rutenberg said in a statement. “At the same time, builders are drawing more permits for new construction so we can accommodate buyers and renters as they return to the marketplace.”
The issuance of permits showed an increase in three out of the four regions. The Northeast registered a 12.2 percent gain, the South a 5.8 percent gain and the West a 14.0 percent gain. However, the Midwest posted a 4.2 percent decline, the release issued by NAHB showed.
