In line with expectations, the pace of nationwide housing starts slowed 2.7 percent in July to a seasonally adjusted annual rate of 1.65 million units, the Commerce Department reported. This rate is exactly on pace with the number of starts that the National Association of Home Builders (NAHB) is forecasting for the year as a whole. Meanwhile, permits for new housing construction remained virtually unchanged in July at a 1.7 million-unit rate.

Gary Garczynski, president of the NAHB and a builder/developer from Woodbridge, Va., said that to hit the NAHB forecast, some slowdown was inevitable from the average 1.69-million-unit pace set in the first two quarters. But this slowing is occurring gradually.

Single-family housing starts declined 2.2 percent to a seasonally adjusted annual rate of 1.32 million units in July. This was only slightly lower than the average 1.33-million-unit rate set in the second quarter. Meanwhile, multifamily starts declined 4.7 percent to a rate of 328,000 units. This compares to a second-quarter average of 337,000 units.

Overall housing starts declined 11.7 percent in the Northeast, while the South and West reported more modest declines of 3.6 percent and 4.3 percent, respectively. As the exception to the rule, the Midwest posted a 5.8 percent gain in housing starts.

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