July housing starts fall as both single-family and multifamily slow
Housing starts fell 12.4%, more than expected, but permits rose 5%, a possible signal of tightening supply
The decline in housing starts, particularly in both single-family and multifamily units, is a concerning sign for the rental market. With fewer new properties being built, the already tight rental supply is likely to get even tighter, which could lead to increased competition for available units and higher rents. This is especially relevant for renters, as a decrease in new construction can limit their options and drive up costs.
The fact that permits, on the other hand, rose 5% suggests that builders are still optimistic about the market and are planning to start new projects in the coming months. This could be a signal that the slowdown in housing starts is temporary, and that construction will pick up again soon. However, it's worth noting that there can be a significant lag between permits being issued and actual construction beginning, so it's unclear when these new projects will come online.
Looking ahead, renters and investors alike will be watching to see if the trend of slowing housing starts continues, and how quickly permits translate into actual new construction. If supply remains constrained, we can expect to see upward pressure on rents, which could have implications for affordability and the overall rental market. Keep an eye on upcoming reports on rent growth and construction trends to see how this story unfolds.
Originally reported by housingwire.com. RentNews adds analysis for real estate & property readers.