Key facts
- Privately-owned housing starts in June were at a seasonally adjusted annual rate of 1,427,000.
- This is 19.0 percent above the revised May estimate.
- Single-family housing starts in June were at a rate of 895,000.
- Privately-owned housing units authorized by building permits in June were at a rate of 1,367,000.
- This is 3.0 percent below the revised May rate.
- Single-family authorizations in June were at a rate of 871,000.
Housing starts in June surpassed expectations, reaching a seasonally adjusted annual rate of 1,427,000, a significant increase from May's revised figure. This rise was primarily driven by a substantial increase in multi-family construction starts. However, single-family housing starts saw a marginal decrease, falling to 895,000.
In contrast, housing permits, a leading indicator for future construction, remained near cycle lows. In June, privately-owned housing units authorized by building permits were at a rate of 1,367,000, a 3.0% decrease from May. Single-family authorizations also declined, reaching 871,000. This divergence suggests builders are hesitant to commit to new projects despite a recent uptick in starts, likely due to stagnant new home sales and concerns about future demand.
The article notes that housing starts can be a volatile metric, subject to significant revisions. The recent performance highlights this volatility, with multi-family starts collapsing in May before an epic rise in June. The persistent weakness in single-family permits, which have been falling for some time, is a key factor keeping overall permits near historic lows. Builders are offering incentives like sub-6% mortgages to support new home sales, which are reportedly at 2019 levels, while existing home sales lag.