PhotoA decline in construction of single-family homes and multi-unit buildings sent overall housing starts lower in July.

The Commerce Department reports ground-breakings fell 4.8% last month to a seasonally adjusted annual rate of 1,155,000. As it released the July figures, the government revised its June estimate downward to 1,213,000 from the initially reported 1,215,00.

Construction of single family homes slipped 0.5% last month to a rate of 856,000. Starts on buildings with five units or more plunged 17.1% for a rate of 287,000.

Overall construction was up 0.6% in the South, and was down 1.6% in the West, 15.2% in the Midwest and 15.7% in the Northeast.

“New-home production numbers this month are in line with our forecast for a slow and steady recovery of the housing market,” said National Association of Home Builders (NAHB) Chief Economist Robert Dietz. “We saw multifamily production peak in 2015, and this sector should continue to level off as demand remains solid.”

Building permits

The outlook for construction in the months ahead leaves something to be desired.

Issuance of building permits fell 4.1% to a seasonally adjusted annual rate of 1,223,000. Single-family authorizations held steady at at a rate of 811,000, while permits issued for multi-unit buildings plunged 12..% to a rate of 377,000.

Permits shot up 19.2% in the Northeast, but fell 1.4% in the South, 7.9% in the West, and 17.4% in the Midwest.

“The overall strengthening of the single-family sector is consistent with solid builder confidence in the market,” said NAHB Chairman Granger MacDonald. “The sector should continue to firm as the job market and economy grow and more consumers enter the housing market.”

The complete report may be found on the Commerce Department website.

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