Housing Permits Lose Steam In July

Real Estate Broker/Owner

According to the Census Bureau total housing permits fell by -1.8% in July from June to a seasonally adjusted annual rate of 560,000. 

Interestingly the decline in housing permits in July was driven by multi-family units.  According to the Census Bureau, single family housing permits were up 5.8% from last month but 2-4 unit properties were down -21.7% and 5+ unit properties were down -26.3% from the previous month.

Compared to last year single family housing permits were down -20.3%, 2-4 unit properties were down -48.6% and 5+ unit properties were down -73.2%.

This data is a representation of the broader real estate market.  While demand for single family homes appears to have stabilized in recent months, the commercial real estate market continues to free fall, adding significant stress to bank's balance sheets.

The underlying trend is that there is not sufficient demand for real estate, residential or commercial, to stabilize real estate values due to escalating delinquencies.

Comments (2)

Jim Crawford
Maximum One Executive REALTORS® - Atlanta, GA
Jim Crawford Atlanta Best Listing Agents & REALTOR

This is actually a good thing.  I've mentioned before that economist look for 6 months of movement in one direction to declare a trend.  They do not go month to month.  A rise last month in permits could be dismissed as a 'pent up demand.'   Walls street uses any news to get enthusiasm up and get money back in the market.  A 48% run up in the stock market since January is over done in most persons opinion.  At some point this peak will be tested with reality and sentiment which is based on consumers and their confidence to go further out on the thin ice.  Rising unemployment will curb the public's appetite to buy big ticket items and make large purchase like a new home.

Aug 19, 2009 12:31 AM
Mark MacKenzie
Phoenix, AZ

Jim:  I agree with every point you made.  What is amazing to me is just how steep the decline has been for commercial real estate.

Aug 20, 2009 12:51 AM