COMMERCE DEPARTMENT: June Housing Starts Down, But Permits Increase
By David M. Kinchen
Huntingtonnews.net Real Estate Writer
Housing starts in June were at a seasonally adjusted annual rate of 549,000, 5 percent below the revised May estimate of 578,000 and 5.8 percent below the June 2009 rate of 583,000, according to a report released Tuesday, July 20 by the U.S. Commerce Department.
Most of the decline was in the multifamily sector, which dropped 21.5 percent, the report said. Single-family housing starts in June were at a rate of 454,000 -- 0.7 percent below the revised May figure of 457,000.
On the positive side for the nation's home builders, building permit issuance, an indicator of future building activity, rose 2.1 percent to a seasonally adjusted annual rate of 586,000 units in June.
While single-family permits fell 3.4 percent to 421,000 units for the month, that decline was due entirely to a drop-off in the South, with every other region holding steady or better on the single-family side. Multifamily permits rose 19.6 percent to a seasonally adjusted annual rate of 165,000 units in June. Combined single- and multifamily permit issuance was up 32.3 percent in the Northeast, down 10.8 percent in the Midwest, down 3.1 percent in the South, and up 9.7 percent in the West in June.
“As our most recent member surveys have indicated, builders remain very cautious in light of the sluggish pace of the economic recovery and the hesitancy they are seeing among potential home buyers,” said Bob Jones, chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich. “However, today’s report is actually somewhat encouraging, because it indicates that single-family production is stabilizing following an expected lull that occurred with the end of the home buyer tax credit program.”
“The government’s figures suggest that single-family housing production may be finding a bottom following the tax credits,” agreed NAHB Vice President and Senior Economist Bernard Markstein. “Over the next several months, we expect to see some improvement in both housing starts and sales activity as buyers come forward to take advantage of the very attractive home prices, historically low mortgage rates and excellent selection that characterize today’s new-home marketplace. However, builders continue to confront significant challenges in obtaining financing for viable new projects, and this problem remains a formidable obstacle to economic growth.”
Privately-owned housing completions in June were at a seasonally adjusted annual rate of 886,000. This is 26.2 percent above the revised May estimate of 702,000 and is 11.0 percent above the June 2009 rate of 798,000. Single-family housing completions in June were at a rate of 676,000; this is 31.3 percent above the revised May rate of 515,000. The June rate for units in buildings with five units or more was 202,000.