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Housing Starts, Building Permits Take a Hit in June

Housing starts in June fell 0.9% month-over-month to a rate of 1,253,000, which is a marginal decline from May’s revised estimate of 1,265,000,  according to information from the U.S. Census Bureau. 

The report, though, states June’s estimates are still 6.2% above June 2018’s rate of roughly 1.18 million. Single-family starts in June came in at 847,000, which is 3.5% above the revised May 2019 figure of 818,000. 

“Strong employment, wage growth and lower mortgage rates are giving potential home buyers a healthy boost. The improvement in home builder confidence for single-family homes in July supports this narrative. Lower mortgage rates and increasing household income should spur new home purchases,” First American Deputy Chief Economist Odeta Kushi. “While overall housing starts are down 0.9 percent, the pace of single-family housing starts, 847,000 (SAAR) increased 3.5 percent above the May figure. This is particularly important as it represents near-term new supply that the housing market is lacking.”

CNBC stated that forecasts called for housing starts to drop to 1.26 million for June 2019. 

Building permits took the hardest hit in June, falling to an annual rate of 1,220,000—the lowest rate since May 2017. June’s rate represents a month-over-month decline of 6.1% and an annual drop of 6.6% from June 2018’s rate of 1.3 million. 

Housing completions fell to an adjusted rate of 1,161,000, which is a 4.8% drop by May’s estimate of nearly 1.2 million, and a 3.7% decline from June 2018’s rate of 1,205,000.

Single‐family housing completions in June fell 1.8% from the month prior to 870,000. 

“The number of completed new homes, waiting to hit the market, declined 4.8% from May, and were 3.7% lower than a year ago. The change was driven by significant weakness in the Midwest region, which experienced record rainfall and flooding during the month of June,” said Geroge Ratiu, Senior Economist for realtor.com. “The upper-end of the housing market continues to be saturated, while new supply in the affordable range remains scant. This is evidenced by the price distribution of new homes, 52% of which sold at prices above $300,000 in June.”

About Author: Mike Albanese

Mike Albanese is a reporter for DS News and MReport. He is a University of Alabama graduate with a degree in journalism and a minor in communications. He has worked for publications—both print and online—covering numerous beats. A Connecticut native, Albanese currently resides in Lewisville.
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