Multi-Family Housing Starts up 28.5%, Single Family Starts Fall 0.9%

The two leading indicators among measures of residentialrnconstruction activity, building permits and housing starts, posted healthy gainsrnin June the Census Bureau and Department of Urban Development said today.  Both numbers came in above analyst estimates,rnhowever gains were concentrated in the multi-family sector; single familyrnnumbers were flat. The third measure, housing completions, was down butrnremained significantly higher than a year earlier.</p

Bloomberg noted that the unusual rise for multi-family unitsrnreflects high levels of rent which were also evident in today’s CPI report.</p

Permits for residential construction were authorized at arnseasonally adjusted annual rate of 1,343,000 units, a 7.4 percent increase overrnMay and 30.0 percent above authorizations in June 2014 of 1,033,000.  The consensus estimate for the number was 1,178,000.rn May permitting numbers were revised downrnfrom the original 1,275,000 units to 1,250,000. rn</p

Permits for single family construction increased from a raternof 681,000 units (revised from 683,000) to 687,000, a gain of 0.9 percent, 6.0rnpercent higher than a year earlier. rnPermits for construction of units in building containing five or more werernrunning at a 621,000 unit rate, an increase of 16.1 percent month-over-monthrnand 79.0 percent on an annual basis.</p

On a non-seasonally adjusted basis the report estimates therernwere 134,800 permits issued during the month compared to 111,100 in May.  There were more single family permits issuedrnthan multi-family permits – 69,400 to 61,800.</p

Housing starts, the only metric to fall in May, recoveredrnmuch of that loss in June, rising by 9.8 percent to a seasonally adjustedrnannual rate of 1,174,000.  Analysts hadrnprojected a rate of 1,125,000 units. The May estimate, which had originallyrnrepresented an 11.1 percent decline from April, gained a little ground as well,rnrevised upward to 1,069,000 from 1,036,000. rnJune 2015 housing starts were 26.6 percent higher than the 927,000 raternin June 2014.</p

Single family starts were estimated at a rate of 685,000, arn0.9 percent dip from the revised (from 680,000) May estimate of 691,000.  Construction was begun on multi-family unitsrnat an annual rate of 476,000 units compared to 370,000 units in May, a gain ofrn28.5 percent and up 55.0 percent year-over-year.</p

Housing starts, unadjusted, were estimated at 110,400 forrnthe month compared to 99,700 in May.  Thernstarts were split 69,400 for single family and 39,900 for multi-family units. </p

Housing units were completed at a rate of 972,000 units inrnJune, down 6.7 percent from May’s revised estimate of 1,042,000 unitsrn(originally reported at 1,034,000).  Thisrnwas still 22.0 percent higher than the estimates of completions – 797,000 – in Junern2014.</p

Single family completions were at a seasonally adjusted raternof 647,000, down 0.3 percent from the May estimate of 649,000.  Completions of multi-family was estimated atrna rate of 317,000, down 386,000 in May (-17.9 percent) but an increase of 53.1rnpercent from the previous June.</p

Completions on a non-seasonally adjusted basis were estimatedrnat 87,400 compared to 85,500 in May.</p

At the end of the reporting period there were an estimatedrn153,000 permits issued but under which construction had not started, up fromrn141,000 in May.  Single-family permits inrnthis category numbered 67,000 and multi-family 84,000.</p

An estimated 884,000 units of housing were underrnconstruction at the end of June, up from 876,000 at the end of May.  The lion’s share of these, 500,000 were unitsrnin buildings with five or more.</p

Issuance of permits increased in the Northeast by 2.8 percentrncompared to May and were up 159.6 percent from a year earlier.  The rate of housing starts increased 35.5rnpercent from May to June and 112.4 percent year-over-year but single familyrnhousing starts were actually down by 27.3 and 20.0 percent. Units wererncompleted at a rate 59.0 percent lower than in May and down 14.3 percent fromrnJune 2014.</p

In the Midwest permitted rose 2.9 percent for the month but droppedrn11.6 percent from the previous year. Housing starts declined by 0.7 percent andrn27.5 percent for the two periods. rnCompletions during the month were lower by 6.3 percent but were up 1.4rnpercent from the previous June.</p

Permits in the South were issued at a rate that was 10.4 percentrnhigher month-over-month and 18.0 percent above the previous June. Housingrnstarts rose by 13.5 percent from May and 42.8 percent from June 2014. Therernwere 7.7 percent more units completed than during May and 33.3 percent morernthan the year before.</p

The West saw a rise in permitting of 9.5 percent from Mayrnand 27.4 percent year-over-year.  Housingrnstarts dipped 6.0 percent from the previous month but were up 9.6 percent from arnyear earlier. Unit completions were down 1.3 percent from May but 29.5 percentrnhigher on an annual basis.

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