Residential Construction Data Belies Recent Enthusiasm

Building permits and housing startsrnboth declined in June according to data released this morning by thernU.S. Census Bureau and the Department of Housing and UrbanrnDevelopment. At the same time May data was revised higher for mostrnvariables. The new residential construction data may somewhat dampenrnthe industry’s growing enthusiasm over the last few weeks based onrnrising sales and prices. That enthusiasm was most strongly evidencedrnyesterday by strong positive results from the most recent NationalrnAssociation of Home Builders (NAHB) Housing Market Index (HMI), arnmeasure of home builder confidence, which shot up six points in Julyrnto a seven-year high.</p

Building permits fell 7.5 percent fromrna seasonally adjusted rate of 985,000 in May to 911,000 in June. The May rate reflected an upward revision from the 974,000 originallyrnreported. The June rate is 16.1 percent higher than one year earlierrnwhen permits were issued at an annual rate of 785,000. Permits forrnsingle-family construction were up a slight 0.6 percent to 624,000rnunits from a revised 620,000 units in May (originally reported atrn622,000) and were 24.6 percent above the pace in June 2012. Permitsrnfor construction of units in building with 5 or more units fell torn261,000 from 338,000 units in May, a decline of 22.8 percent.</p

Housing starts fell 9.9 percent from arnrevised 928,000 units in May to a rate of 836,000 in June. May’srnhousing 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 ofrn757,000 units. Single-family starts were at a rate of 591,000, downrn0.8 percent from May’s 596,000 (revised from 599,000) pace. Startsrnin multi-unit buildings were at a rate of 236,000, down 26.7 percentrnfrom May.</p

Housing completions were up, rising 6.3rnpercent to a seasonally adjusted rate of 755,000 from a revisedrnestimate of 710,000 (from 690,000) in May. The recent rate is 20.2rnpercent higher than completions one year earlier which were at thernrate of 628,000.</p

At the end of the reporting periodrnthere were 102,100 permits that had been authorized nationwide butrnfor which construction had not yet started. This number is unchangedrnfrom May as is its distribution among single-family permits (54,000)rnand multi-family (46,000) and virtually unchanged across regions withrnmore than half of the outstanding permits located in the South. There were 624,000 units under construction at the end of the periodrncompared to 621,000 in May.</p

Permits in the Northeast were up 3.9rnpercent from May and 32.1 percent year-over-year. Housing startsrnfell 12.1 percent month-over-month but were up 20.5 percent from Junern2012. </p

The Midwest saw permits fall 4.6rnpercent from May but rise 19.7 percent from a year earlier. Startsrnwere down 7.4 percent for the month but were running 29.9 percentrnahead of June 2012.</p

In the South permits fell 11.2 percentrnfrom the previous month and housing starts fell 12.0 percent. Permits and starts were up 13.3 percent and 14.9 percent respectivelyrnfrom June 2012. </p

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

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