Mark Palim, Fannie Mae’s assistant chief economist, said he expected limited benefit from recent mortgage rate cuts “given current supply-side challenges and affordability”.
He added: “For the housing market, at the current case level, the lack of stocks of houses for sale and the ongoing bottlenecks in the home builder’s supply chain remain the main barriers to real estate buying activity.”
Mike Fratantoni, chief economist for the Mortgage Bankers Association, responded more positively to the data, noting that while single-family and multi-family starts decreased in July, single-family home starts were up nearly 12% compared to 2020.
He added that there are almost 690,000 more single-family homes under construction than at any time since 2007. This is “a positive sign given the remarkably low inventory on the market.” 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 home builders got more building permits.