The latest figures on home construction just hit the tape. So what happened in July?
* Overall housing starts climbed 1.7% from June to a seasonally adjusted annual rate of 546,000. That missed expectations for a reading of 560,000. June's figure was revised down to 537,000 from 549,000. Building permits slumped 3.1% to 565,000 from a downwardly revised 583,000, worse than the 0.5% decline that economists were expecting. That leaves permits at the lowest level since May 2009.
* By property type, single family starts dropped 4.2%, the third monthly decline in a row. They're now running at a 14-month low. The volatile mutlifamily
category jumped 32.6% after plunging 33.3% a month earlier. Single family permits dropped 1.2% -- the fourth decline in a row -- while multifamily permits slumped 8%.
* Starts were strong in the Northeast (+30.5%) and Midwest (+10.7%). But they were flat in the West and down 6.3% in the South. Permits dropped in most of the country, falling 25.9% in the Northeast, 4.9% in the West, and 1.1% in the Midwest. But they rose 3.9% in the South.
When you can't sell homes, you aren't going to build them. So it should be no surprise that builders are still sitting on their hands. In July, single-family starts fell to their lowest level in more than a year, while permitting activity slumped to the lowest since May 2009. Regional performance was mixed when it came to starts, but relatively poor on the permitting front.
Normally an upswing in construction helps the economy emerge from recession. But not this time. Construction activity remains anemic, and the industry continues to hemorrhage
jobs. The ironic thing is that new home inventory is extremely lean. The oversupply problem there has been "fixed." But since there's so much competition from nearly-new distressed inventory and foreclosures, builders aren't willing or able to ramp up activity. Hence, no housing recovery.