Housing starts step back in June
Home builders took a step back in June, according to the latest Monthly New Residential Construction report released this morning by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.
Housing starts in June fell 8% to a seasonally adjusted annual rate of 1.434 million from the revised May estimate of 1.559 million. The latest figure is also 8.1% below the June 2022 rate of 1.561 million.
Single‐family housing starts in June were at a rate of 935,000, declining 7% below the revised May figure of 1.005 million.
The June rate for units in buildings with five units or more was 482,000, dropping nearly 12% from the previous month’s rate of 545,000.
“Housing starts posted a monthly decline in June as tightening monetary policy helped push mortgage rates up more than a quarter-point over the past month,” said Alicia Huey, chairman of the National Association of Home Builders (NAHB) and a custom home builder and developer from Birmingham, Ala. “Policymakers need to remove regulatory bottlenecks that impede the housing industry’s ability to increase the production of quality, affordable housing."
Total housing permits in June were at a seasonally adjusted annual rate of 1.440 million, which is down 3.7% from the revised May rate of 1.496 million while falling 15.3% compared to the June 2022 rate of 1,701,000.
Single‐family authorizations in June were at a rate of 922,000, rising 2.2 percent above the revised May figure of 902,000.
Permits for buildings with five units or more were at a rate of 467,000 in June, which is nearly a 14% decline from the revised rate of 540,000 in May.
This report follows yesterday's release of the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI), which saw builder confidence move ahead for the seventh straight month.
“While builders have slowed construction activity as interest rates have approached 7%, we anticipate mortgage rates will stabilize later this year in anticipation of the end of Federal Reserve’s tightening cycle,” said Danushka Nanayakkara-Skillington, NAHB’s assistant vice president for forecasting and analysis. “In turn, this could bring home buyers back to the market as affordability conditions improve. And in another sign of cautious builder optimism, single-family permits registered their highest pace since June 2022.”
Here’s how housing starts and permits performed in June on a regional and month-over-month basis:
- In the Northeast, overall starts fell 2.1% as single-family starts declined nearly 12%. Total permits in the region dropped 23.4% with single-permits flat compared to the prior month.
- In the Midwest total housing starts plummeted 33.1% while single-family starts saw a falloff of nearly 20%. Total permits rose nearly 6% as single-family permits saw 4.7% growth.
- In the South, combined starts decreased 4.4% with single-family starts fading by 7.3%. Total permits saw a 2.6% slide in the region but single-family permits moved forward 2.8%.
- In the West, total permits slipped 1.2% but single-famly home starts increased 4.6%. Total permits fell 4% for the month while single-family permits broke even compared to May.
