June US Housing Starts Beat Expectations on Single-Family Strength

Single-family starts since the first of the year have averaged 12.9% greater than in the first six months of 2015; average multifamily starts are 4.4% below the first half of 2015

National Association of Home Builders, Wells Fargo Economics Group
Strengthening single-family housing starts lifted total June U.S. housing construction above expectations, rising 4.8% to a seasonally adjusted annual rate of 1,189,000 starts.
Strengthening single-family housing starts lifted total June U.S. housing construction above expectations, rising 4.8% to a seasonally adjusted annual rate of 1,189,000 starts.

Strengthening single-family housing starts lifted total June U.S. housing construction above expectations, rising 4.8% to a seasonally adjusted annual rate of 1,189,000 starts. Single-family starts rose 4.4% to an annual rate of 778,000 units, while multifamily starts rose just 1.5% to a 392,000-unit pace.

According to the National Association of Home Builders’ analysis of the June housing estimates from the Census Bureau and the Department of Housing and Urban Development (NAHB), “Taken together, these trends are consistent with the NAHB forecast, which sees gathering strength for single-family construction and a leveling off of multifamily production as the market finds a balance between housing demand and supply.”

The average monthly estimate of single-family starts since the first of the year is 12.9% greater than that of the first six months of 2015. And the average estimate of multifamily starts year-to-date is 4.4% below the first six months of 2015.

Single-family starts rose in all four regions, but were up the most in the Northeast, where they soared 31.6%. Comparing average monthly estimates year-to-date to the first six months of 2015, single-family starts are having a much better 2016 in all four regions:

  • Northeast +24.6%
  • Midwest +22.6%
  • South +11.5%
  • West +5.1%

The NAHB takes a long view of the monthly housing numbers, examining the count of homes currently under construction. “As of June, 57% of units under construction in the nation were multifamily (583,000), a 13% gain in the total from a year earlier,” according to the home builders’ association. “There were 432,000 single-family homes under construction in June, which is 15% higher than June 2015. This is the highest count since October 2008 and is an indicator that growth in home construction is a key bright spot in the overall economy, given the lackluster GDP measure for the first quarter.”

The Wells Fargo Economics Group anticipates another impact of strengthening U.S. housing deep in the data: “Single-family completions have surged 17.9% over the past year. The gain should provide a boost to new home sales, which have been held back by a lack of supply.”

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