Housing starts in the US fell 7% month-on-month in July, after rising 3.5% in June. Building licenses, which decreased by 5.3% in June, increased by 2.6% in July.
If we look at the details of the data; Privately owned housing units allowed with building permits in July totaled 1635K per year in seasonally adjusted terms. In addition to the 2.6% increase compared to June, there is an increase of 6% compared to July 2020. Permits for detached houses decreased by 1.7% compared to June and became 1048K, while unit permits for apartments were 532K. Housing starts are 1534K, 7% below June and 2.5% above July 2020. There is a 4.5% decrease compared to June with 1111K in detached houses, while the beginnings are 412K in apartments. As for the completed residences, we are above 5.6% compared to June and 3.8% compared to July 2020.
The main issues concerning the housing market are inflation and mortgage rates. In fact, low mortgage rates had an increasing effect on housing prices on demand. However, since discretionary expenditures carry the risk of entering the inflation vortex, they will have a limiting effect on the potential for increase in final prices. In addition, we observe a decrease in the demand for detached houses, which increased during the pandemic, compared to June. The height in construction costs will force the companies in this case. The demand that the state will make through the infrastructure package will have a relaxing effect in the future. It is an experience from 2008 that low rates can be the new cause of crisis due to the potential to burst a price bubble. Therefore, credit conditions that remained low for a long time are not positive either.
Kaynak Tera Yatırım
Hibya Haber Ajansı
Kaynak: Hibya Haber Ajansı
