Homebuilding rates accelerated in June, surpassing expert forecasts for the month and further fortifying the idea that housing is indeed on the mend. According to the Commerce Department, housing starts rose 4.8 percent from a month earlier to a seasonally adjusted annual rate of 1.189 million in June.
However, while both permits and starts improved on a month-to-month basis, the total permits represented a decline of 15 percent compared to last June, and the total number of starts represented a decline of 1 percent compared to last year.
“While we often see volatility in the month-to-month data, June’s rise in housing starts shows a sturdy demand for new homes as we move into the second half of the year,” says Quicken Loans Vice President Bill Banfield. “The growing job market coupled with low mortgage rates continues to provide a boost to the housing market.”
Privately owned housing units authorized by building permits in June were at a seasonally adjusted annual rate of 1,153,000. This is 1.5 percent above the revised May rate of 1,136,000, but is 13.6 percent below the June 2015 estimate of 1,334,000.
Single-family authorizations in June were at a rate of 738,000; this is 1.0 percent above the revised May figure of 731,000. Authorizations of units in buildings with five units or more were at a rate of 384,000 in June.
Single-family housing starts in June were at a rate of 778,000; this is 4.4 percent above the revised May figure of 745,000. The June rate for units in buildings with five units or more was 392,000.
Privately owned housing completions in June were at a seasonally adjusted annual rate of 1,147,000. This is 12.3 percent above the revised May estimate of 1,021,000 and is 18.7 percent above the June 2015 rate of 966,000.
Single-family housing completions in June were at a rate of 752,000; this is 3.7 percent above the revised May rate of 725,000. The June rate for units in buildings with five units or more was 386,000.
“[These] headline numbers seem encouraging, with monthly increases in new construction, but the construction of multi-family housing is slowing and we are still not seeing the growth needed to address inventory challenges,” says REALTOR.com Chief Economist Jonathan Smoke. “The June data points on new construction show little change from what we have already observed during the spring and summer, and continues to indicate that builders are starting what they already permitted earlier this year but are not being bullish about demand for this fall and winter. We are continuing to see that new construction is failing to keep up with household formation, so the low vacancies in rentals and the dearth of homes for sale will continue to provide a solid foundation for rising rents and home prices.”
For more information visit http://www.census.gov/construction/nrc/index.html.