Mark Palim, Fannie Mae’s deputy chief economist, said he expected a limited benefit from recent reductions in mortgage rates, “given current supply-side and affordability challenges”.
He added: “For the housing market, at current case levels, the lack of inventories of homes for sale and continued supply chain bottlenecks experienced by homebuilders remain the primary constraints on home purchase activity.”
Mike Fratantoni, chief economist at the Mortgage Bankers Association, gave a more positive response to the data, noting that while single-family and multifamily starts declined in July, single-family starts were almost 12% higher compared to 2020.
He added that there were now more single-family homes under construction than at any time since 2007, with almost 690,000 being built, saying that it was “a positive sign, given the remarkably low levels of inventory on the market”, predicting that the pace of construction would continue to increase.
Holden Lewis, home and mortgage expert at NerdWallet, said he believed housing starts would “bounce back in a month or two” as builders secured more building permits.