Total housing starts fell 4% in July from a downwardly revised reading in June, according to a report from the U.S. Housing and Urban Development (HUD) and Commerce Department. Due to a decline in multifamily production, the seasonally adjusted annual rate of 1.19 million units is the number of housing units builders would begin if they kept this pace for the next 12 months.

Within this overall number, single-family starts increased to 876,000 units (1.3%). The multifamily sector, which includes apartment buildings and condos, fell to a 315,000 pace (16.2%).

“Despite housing affordability headwinds, builders remain confident about the market and this is reflected in recent modest gains in single-family starts,” said Greg Ugalde, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Torrington, Conn.

On a regional and year-to-date basis, combined single-family and multifamily starts in July rose in the South (3.7%) but declined in Northeast (5.7%), Midwest (7.9%) and West (12.3%).

Permits, which are a harbinger of future housing production, saw an overall increase to 1.34 million units (8.4%). Single-family permits edged higher to an 838,000 rate (1.8%) while multifamily permits jumped to a 498,000 pace (21.8%).

“Permits bottomed out in April and single-family starts hit their low point in May, and now we are starting to see the gradual improvement in the market that we’ve been forecasting,” said NAHB chief economist Robert Dietz.

The regional permit data on a year-to-date basis showed a rise in the Northeast (2.4%) and a decrease in the Midwest (7.15%), South (0.1%) and West (6.8%).

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