In a sour sign for U.S. real estate in the near term, U.S. housing starts fell to a 12-month low in July as mortgage rates remained elevated and U.S. consumer sentiment slid further.
Seasonally adjusted numbers from the Department of Housing and Urban Development showed starts hitting 1.45 million units in July, a 9.6% drop from the 1.6 million reported in June, a second major decline after starts dropped precipitously in May before ticking up slightly in June.
The major bright spot in the report was the Northeast, which was the only region in the report to see solid growth. The Northeast notched 230,000 starts in July, a bump from 139,000 in June and 75% above the tally for the prior-year month.
Growth in the Northeast, however, wasn't enough to offset a monthly drop of 33.8% in the Midwest and an 18.7% slide in the South. Housing starts in the West held at a seasonally adjusted 367,000 units, just shy of the 377,000 June starts and up from 342,000 in May.
The overall dip added another figure to early signs of a potential slowdown in real estate that so far has manifested in everything from cooling office investment sales to an easing in multifamily rent growth.
And unlike the May plunge of 13%, which reversed a vigorous start to the year, July’s figure was the lowest number of starts in at least 12 months, marking a year-over-year decrease of 8.1%.