After a very weak June, where housing starts were down nearly 10%, starts rose sharply in July, but missed their forecast. Although new home construction rose 5.9% in July “…to a seasonally adjusted annual rate of 896,000 units”, economists had expected that number “…to rise to a 900,000-unit rate” for July. In addition, homebuilding permits were up 2.7% in July, coming in at a 943,000-unit pace and falling just short of the predicted permit rate of 945,000-unit pace.
The rise in new homes came primarily due to apartment construction, which tends to be volatile. Builders were actually working on fewer single-family homes, which comprise the majority of the new home market. Because of this, the number of permits to build single-family homes also dipped.
The lack of home buying goes back a few months, showing a mortgage rate rise to 4.4%, more than a full percentage point higher than in May. With the expectations that mortgage rates will drop next month, increasing the projections on new home constructions to a 910,000-unit rate.
How should your company prepare for the next wave of expected new homes? Take advantage of SBS Group’s industry experts who help deliver products that are flexible, customizable, and easy to use. They can help you:
• Build the house the customer ordered
• Control the change order process
• Communicate effectively with vendors
• Go Green with paperless transactions