While Tuesday's residential construction report showed a slight decline in total housing starts for the month of July, the National Association of Home Builders (NAHB) described a larger picture of a relative stability.
"Although single-family housing production slid a few notches in July, the number was right in line with the second-quarter average, so we view this report as an indication of relative stability," said Bob Nielsen, chairman of the NAHB and a home builder from Reno, Nev. "This is in keeping with the fact that not much has changed over the past several months with regard to the outlook for new-home sales and production. Both builders and buyers continue to exercise a great deal of caution due to uncertainty about the current economic climate, the large number of foreclosed homes on the market and concerns about access to credit."
Housing starts in July declined 1.5% to a seasonally adjusted annual rate of 604,000. Single-family starts declined 4.9% to a pace of 425,000.
"Overall housing production held relatively steady in July, with construction of new multi-family projects showing greater strength due to higher demand for rental units," noted NAHB chief economist David Crowe. "Going forward, we expect housing production to show modest improvement through the end of this year, particularly in select markets that do not have large inventories of distressed homes and where economic stability is more apparent."