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July Housing Starts Slip, Led by Single-Family Declines

Despite continuing improvement in builder confidence, housing starts slipped in July to 746,000, with single-family starts accounting for decline, the Census Bureau and ""HUD"":http://portal.hud.gov/hudportal/HUD reported jointly Thursday.

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Housing permits though improved to 812,000, the highest level in almost four years.

Economists surveyed by Bloomberg expected 750,000 starts and 766,000 permits in July.

Total housing completions in June rose to 668,000, the highest level since June 2010.

Even with the dip in starts ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô down 8,000 from June ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô total starts are up 21.5 percent from July 2011. Single-family starts though dropped 35,000 to 502,000 in July, the lowest level since March. Two-to-four unit activity improved 7,000 in July and five-plus unit starts were up 20,000.

Despite the one month drop, the trend in single family starts remains positive. In the last six months, (February-to-July) single-family starts have averaged 502,000 compared with 462,000 in the previous six months and 419,000 in the February-to-July period in 2011.

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Permits too have surged: an average of 759,000 per month in the February-to-July period up from 670,000 in the previous six month and 598,000 in the February-to-July period a year ago.

Completions too are up, averaging 619,000 for the last six months compared with 587,000 in the previous six months and 584,000 in the same period one year ago.

Start activity for multi-family structures (five or more units) underscores the shifts in the housing sector: multi-family starts averaged 217,000 in the last six months up from 188,000 in the previous six months and 145,000 in the same six month period a year ago.

Nonetheless, home builders continue to complete single-family homes at a pace exceeding sales. Single-family completions in the last six months averaged 459,000 compared with sales averaging 358,000.

The census data covered the same month for which the ""National Association of Home Builders"":http://www.nahb.org/ reported builder confidence ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô measured by the Housing Market Index (HMI) ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô rose to 35 (out of 100) from 29.

The July HMI was the highest in more than five years and the month-over-month gain the strongest in almost 10 years.

Any HMI reading below 50 is considered to signal a contraction. Builder confidence for August as reported Wednesday by NAHB rose to 37, the highest level since February 2007.

Total starts fell in three of the four census regions, dropping 13,000 in the South, 11,000 in the West and 1,000 in the Northeast, while improving 17,000 in the Midwest.

Single-family starts fell 13,000 in the Northeast, 11,000 in the West, 6,000 in the South and 5,000 in the Midwest.

Permits rose month-month in three of the four Census regions, improving 25,000 in the West, 22,000 in the South and 10,000 in the Northeast, while dropping 5,000 in the Midwest.

About Author: Mark Lieberman

Mark Lieberman is the former Senior Economist at Fox Business Network. He is now Managing Director and Senior Economist at Economics Analytics Research. He can be heard each Friday on The Morning Briefing on POTUS on Sirius-XM Radio 124.
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