Residential Construction Data Belies Recent Enthusiasm


Building permits and housing starts
both declined in June according to data released this morning by the
U.S. Census Bureau and the Department of Housing and Urban
Development. At the same time May data was revised higher for most
variables. The new residential construction data may somewhat dampen
the industry’s growing enthusiasm
over the last few weeks based on
rising sales and prices. That enthusiasm was most strongly evidenced
yesterday by strong positive results from the most recent National
Association of Home Builders (NAHB) Housing Market Index (HMI)
, a
measure of home builder confidence, which shot up six points in July
to a seven-year high.

Building permits fell 7.5 percent from
a seasonally adjusted rate of 985,000 in May to 911,000 in June.
The May rate reflected an upward revision from the 974,000 originally
reported. The June rate is 16.1 percent higher than one year earlier
when permits were issued at an annual rate of 785,000. Permits for
single-family construction were up a slight 0.6 percent to 624,000
units from a revised 620,000 units in May (originally reported at
622,000) and were 24.6 percent above the pace in June 2012. Permits
for construction of units in building with 5 or more units fell to
261,000 from 338,000 units in May, a decline of 22.8 percent.

Housing starts fell 9.9 percent from a
revised 928,000 units in May to a rate of 836,000 in June. May’s
housing start figure was originally reported at a 914,000 unit rate.
The June figure was 10.4 percent higher than in June 2012, a rate of
757,000 units. Single-family starts were at a rate of 591,000, down
0.8 percent from May’s 596,000 (revised from 599,000) pace. Starts
in multi-unit buildings were at a rate of 236,000, down 26.7 percent
from May.

Housing completions were up, rising 6.3
percent to a seasonally adjusted rate of 755,000 from a revised
estimate of 710,000 (from 690,000) in May. The recent rate is 20.2
percent higher than completions one year earlier which were at the
rate of 628,000.

At the end of the reporting period
there were 102,100 permits that had been authorized nationwide but
for which construction had not yet started. This number is unchanged
from May as is its distribution among single-family permits (54,000)
and multi-family (46,000) and virtually unchanged across regions with
more than half of the outstanding permits located in the South.
There were 624,000 units under construction at the end of the period
compared to 621,000 in May.

Permits in the Northeast were up 3.9
percent from May and 32.1 percent year-over-year. Housing starts
fell 12.1 percent month-over-month but were up 20.5 percent from June

The Midwest saw permits fall 4.6
percent from May but rise 19.7 percent from a year earlier. Starts
were down 7.4 percent for the month but were running 29.9 percent
ahead of June 2012.

In the South permits fell 11.2 percent
from the previous month and housing starts fell 12.0 percent.
Permits and starts were up 13.3 percent and 14.9 percent respectively
from June 2012.

Permits were issued in the West at a
rate 7.2 percent below that of May and 12.6 percent higher than a
year earlier while housing starts were down 5.4 percent an 9.9
percent from the two earlier periods.

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