A 40 percent jump in multifamily housing construction starts from May to June helped residential building grow 4 percent for the month, to an annual rate of $283.4 billion, according to McGraw-Hill Construction Research & Analytics.
The dollar volume of single-family housing construction was down 3 percent in June, and has slipped 26 percent in the first half of 2007.
“It’s still unclear whether single-family housing is close to reaching bottom, and with inventories of unsold homes at high levels and mortgage rates rising, a sustained upturn for single-family housing is not expected any time soon,” said Robert Murray, vice president of economic affairs for McGraw-Hill Construction.
Residential building, both single-family and multifamily, is down 26 percent for the first six months of the year, to $141.6 million (an unadjusted annual rate of $283.2 billion).
Single-family housing starts during the first half of the year were down 14 percent in the South Central region, 25 percent in the Northeast, 26 percent in the Midwest, 28 percent in the West, and 33 percent in the South Atlantic states, the report said.
Because of the steepness in the decline in single-family housing starts during the second half of 2006, it’s expected that the year-to-date decline for single-family housing will grow smaller in coming months, the report said.
Multifamily housing construction was down 27 percent for the first six months of the year, in part because of the brisk pace of construction in the first half of 2006.
There were seven multifamily projects valued at more than $100 million started in the first half of 2007, including $375 million related to the condo portion of the Planet Hollywood hotel and condo project in Las Vegas, and $368 million related to the condo portion of the Fontainebleau project. The other five large multifamily projects were in Vail, Colo. ($160 million); Los Angeles, ($159 million); Snowmass Village, Colo. ($152 million); Hollywood, Fla. ($150 million); and Chicago ($109 million).
“On a broad level, multifamily housing has weakened considerably so far in 2007, but there are still instances such as June that are reminiscent of the booming condo market present during 2005 and the first half of 2006,” Murray said.