The long anticipated rebound in housing will have to wait awhile longer. July housing starts fell 1.5% from June to 604,000 units (seasonally adjusted at an annual rate).

But as is often the case in housing starts, it is worth digging into the numbers to better understand what is happening. The real hit was on single-family housing starts, which fell 4.9%, while multifamily starts were up 7.8%.

However, the decline in single-family starts must be kept in perspective. Single-family starts have been bumping along a bottom. From July 2010 through June 2011, they have averaged 427,000 units — just a tad more than July 2011’s 425,000 units. Permits over the last three months have been essentially flat at 404,000 units, though that is up from the three months prior to that when they averaged 390,000 units. New home construction continues to struggle against weak consumer confidence, competition from foreclosed homes, difficulty in obtaining mortgages for all but those with the best credit rating, and sub-par employment and economic growth.

The news on the multifamily construction front is slightly more positive. Multifamily starts, after dipping to historic lows in the second half of 2009 and first quarter 2010, have generally moved higher. July’s three-month moving average of 161,000 units is the highest it has been since the first quarter of 2009, with the exception of March of this year when the average spiked to 168,000 units. Still, although an improvement over the dark days when multifamily starts fell below 100,000, they are well below the 335,000 starts average for the recent golden age of multifamily construction covering the years 1995 through 2005 when multifamily starts stayed in a relatively narrow range.

One concern is that multifamily permits fell 10.2% in July, though from recent spikes of 203,000 and 215,000 permits in May and June, respectively. With the exception of May and June, the July figure is still the highest multifamily permit level since January 2009’s 208,000 permits. However, if multifamily permits continue to slide in coming months, that would signal a downturn in multifamily construction in 2012 and 2013.

Many positives remain for multifamily construction. Interest rates are exceptionally low. The availability of financing for developers has improved. Rental vacancy rates have been trending downward (second quarter rental vacancy rate of 9.2% is the lowest it has been since second quarter 2002’s 8.4% rate). Any improvement on the jobs front is a positive for the rental market as many of those moving from unemployment to employment move out of shared housing into a rental property. Thus, as with single-family construction, employment and economic growth are essential to continued improvement in the sector.