Multifamily Housing Development Begins Drop 4-% in July as Materials Costs Impression Market In line with Newest Dodge Knowledge Report

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Multifamily Housing Construction Starts Drop Four-Percent in July as Material Prices Impact Market According to Latest Dodge Data Report

HAMILTON, NJ – Overall housing starts decreased 3% in July to a seasonally adjusted annual rate of $ 854.8 billion, according to Dodge Data & Analytics. There were few bright spots during the month, with all three sectors (residential, non-residential and non-buildings) falling in July.

"Building material prices continue to rise and are putting a heavy strain on the start of construction," said Richard Branch, chief economist at Dodge Data & Analytics. “Wood and copper prices have fallen in the last few weeks; However, steel, plastic and other construction-related products continue their triumphant advance. These increases will continue to have an impact on the start of construction in the coming months and somewhat dampen the effects of the stronger economy. Another risk for the industry is the increasing number of COVID-19 cases due to the delta variant. While we do not expect any material business restrictions in response, it is a risk that cannot be completely ruled out. On the other hand, projects entering the planning phase remain at a level not seen in several years, and advances in an infrastructure program and the federal budget give hope that better days are ahead. "

Below is the full breakdown:

Non-building housing starts declined 1% in July to a seasonally adjusted annual rate of $ 171.0 billion. Starts in the public environmental works category declined 25% after a sharp increase in June. Meanwhile, in July, freeway and bridge start-ups advanced 11% and utility / gas start-ups increased 25%. Various non-build starts were flat. On an annual basis, the total new construction starts up to July were 2% higher. Public environmental work starts increased 35% and utility / gas start-ups increased 5%. Motorway and bridge starts and other non-construction starts were lower year-on-year, losing 4% and 19% respectively.

In the 12 months to July 2021, total no-construction starts were 2% lower than in the 12 months to July 2020. Construction starts for public environmental works were 32% higher, while utility and gas start-ups decreased by 18%. In the first seven months, starts for highways and bridges were up 1%, and starts for other non-construction projects were 25% lower.

The largest non-construction projects that broke ground in July were the $ 728 million I-6 project in Indianapolis, IN, the $ 315 million Kew Lake Water Supply project in Enid, OK, and Cavalier Solar Farm in Surry County, VA.

Non-residential housing starts declined 1% in July to a seasonally adjusted annual rate of $ 283.8 billion. Commercial startups lost 19% over the month as warehouse, office and retail startups decreased while hotel startups increased. Institutional start-ups increased 11% during the month due to increases in healthcare, leisure and transportation, while training starts decreased. Production starts saw solid growth in the month, almost doubling compared to the June level. In the first seven months of 2021, non-residential housing starts were 4% higher than in the first seven months of 2020. Commercial housing starts increased 5% and production starts increased 45%, while institutional housing starts 1% lower was.

In the 12 months to July 2021, housing starts for non-residential buildings were 8% lower than in the 12 months to July 2020. Commercial housing starts decreased by 8%, while housing starts for institutional investors decreased by 5%. Production starts decreased by 26% in the 12 months ended July 2021.

The largest non-residential projects that broke ground in July were the $ 1.5 billion JP Morgan Office Tower in New York, NY, and the Inglewood basketball arena in Los Angeles, California, worth $ 1 billion , and the $ 825 million REG Geismar Biofuels Plant in Geismar, LA.

Housing starts decreased 6% in July to a seasonally adjusted rate of $ 400.0 billion. Single-family homes lost 6% in July, while multi-family startups plummeted 4%. Over seven months, the start of housing was 30% higher than in the same period a year ago. Single family home startups increased 34% while apartment buildings were 19% higher.

In the 12 months to July 2021, total new startups in residential buildings were 23% higher than in the 12 months to July 2020. Single-family startups increased by 29%, while multi-family startups increased by 8% on a 12-month total.

The largest apartment buildings for the groundbreaking ceremony July included the second phase of the Sendero Verde project, valued at $ 223 million in New York, NY, the Chestnut Commons in Brooklyn, NY, valued at $ 203 million, and the mixed-use $ 100 Flatbush project valued at $ 194 million in Brooklyn, NY.

At the regional level, July launches increased in the Northeast, Southeast and Midwest regions, but declined in the South Atlantic and West regions.

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