New-Home Starts Stay Robust in June
The pace of new home construction remained strong in June, closing out the quarter at a seasonally adjusted annual rate above 2 million housing starts for the second quarter in a row, according to U.S. Commerce Department figures released on July 19.
For the month, the pace of housing starts remained unchanged from revised May figures at a seasonally adjusted annual rate of 2.004 million units, which was 9.7% above the pace of a year ago.
Single-family home construction slowed 2.5% to a pace of 1.667 million units in June but was still 9.2% ahead of the starts rate a year earlier.
“Builders continue to build to meet very strong demand,” said NAHB President Dave Wilson. “Mortgage rates, though they have risen slightly in recent weeks, are still very favorable and our surveys show that builders are confident that the market will stay strong in the months ahead.”
“Demand, fueled by favorable mortgage rates, as well as strong household income and job growth in most regions, continues to drive the housing market,” said NAHB Chief Economist David Seiders. “High lot prices and land-use controls in many areas do constrain supply and are a concern for many builders.”
While housing starts last month held up to May’s level of activity for the nation as a whole, the different regions of the country continued to display volatility, with the exception of the Northeast, where construction of new homes and apartments was off a scant 0.5%.
The Midwest was down 12.1% following a 16.9% surge in May; the West dropped 10.4% after a 9.4% increase during the previous month; and the South jumped 11.4% in June on the heels of an 11.9% slump in May.
Multifamily housing starts climbed 14.2% in June to a seasonally adjusted rate of 337,000 units, which was 12% better than their year-earlier pace.
Issuance of total building permits rose 2.4% to a seasonably adjusted rate of 2.111 million units for the month, with permits for single-family activity up 1.3% to a rate of 1.649 million units and multifamily permits up 6.5%.
“Many of the permits authorized are for homes that have not been started, and the backlog of unused single-family permits has risen to a historically high level,” Seiders said.
“Builders are facing very strong demand for homes, and the drawn-out regulatory process in many local jurisdictions has encouraged builders to accumulate an unusually large supply of unused permits to be able to meet future housing demand,” Seiders added.
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