The U.S. Commerce Department has reported some economic good news for contractors: Production and permitting of new single-family homes continued an upward swing for July.

However, the declines on the multifamily side dragged down the overall numbers, with combined single- and multifamily starts down 1 percent to a seasonally adjusted annual rate of 581,000 units and combined single- and multifamily permits down 1.8 percent to a 560,000-unit rate.

“With the impending expiration of the first-time home buyer tax credit at the end of November, July was probably the last month in which to get homes permitted and started in time for customers to take advantage of that valuable incentive,” said Joe Robson, chairman of the National Association of Home Builders and a home builder from Tulsa, Okla. “Builders were responding to improved demand related to that upcoming deadline and also to the first signs of an economic recovery. However, it remains to be seen what happens after the tax credit expires, and the severe credit crunch that has curtailed many multifamily projects is looming over single-family builders as well. Congress and the administration need to take action now in order to maintain the momentum toward a housing and economic recovery.”

The NAHB said it is calling on Congress to extend the first-time home buyer tax credit for another year and to offer it to all income-eligible buyers. In addition, NAHB is urging Congress to help eliminate the credit crunch, correct faulty appraisal practices and expand net-operating-loss tax provisions that can help avoid more layoffs.