Home Building Boost June Housing Starts

Housing starts, buoyed by a strong home building report, improved by nearly 5 percent in June, HUD and the Census Bureau reported yesterday.

The report said privately owned housing starts in June came in at a seasonally adjusted annual rate of 1.189 million, 4.8 percent higher than May’s revised estimate (1.135 million), but 2.0 percent lower than a year ago. Single-family housing starts rose by 4.4 percent (778,000) from May’s revised 745,000. The June rate for units in buildings with five units or more rose by 1.6 percent to 392,000.

Regionally, results were mixed, with starts falling in the South and Midwest. In the South, starts fell by 3.4 percent in June to 571,000 units, seasonally adjusted, from 591,000 in May but improved by 3.4 percent from a year ago. In the Midwest, starts fell by 5.2 percent in June to 184,000 units from May’s 194,000 but improved by 26 percent from a year ago.

In the West, starts jumped by a healthy 17.4 percent to 317,000 units, seasonally adjusted, in June from May’s 270,000 and improved by 8.9 percent from a year ago. In the Northeast, starts rose by 46.3 percent to 117,000 units from May’s 80,000 but fell by nearly 48 percent from a year ago.

Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C., said the June increase in starts easily beat market expectations, which had been weighed down by softer building permit data from prior months.

“The earlier weakness in housing permits likely reflects delays in the permitting process,” Vitner said. “Single-family completions have surged 17.9 percent over the past year. The gain should provide a boost to new home sales, which have been held back by a lack of supply.”

The report said privately owned housing units authorized by building permits in June rose by 1.5 percent to 1.153 million from May’s revised 1.136 million, but fell by 13.6 percent from a year ago. Single-family authorizations in June rose by 1 percent to 738,000; authorizations of units in buildings with five units or more rose by 1.9 percent to 384,000.

Privately owned housing completions in June came in at 1.147 million, 12.3 percent higher than May’s revised 1.021 million and nearly 19 percent higher than a year ago. Single-family housing completions rose by 3.7 percent to 752,000; the June rate for units in buildings with five units or more improved to 386,000.