Total U.S. housing starts in June jumped 8.3% to a 1.215-million-unit seasonally adjusted annual rate and the Census Bureau and HUD’s revisions halved the decline estimated in May. Permits for future residential construction also increased, climbing 7.4%.
“The rebound in housing starts was widely expected,” according to the Wells Fargo Economics Group’s analysis of the Commerce Department’s monthly data. “Activity in prior months had been held back by unusual seasonal factors that have now largely played out.”
Starts of single-family construction increased 6.3% to an 849,000-unit annual rate. Single-family starts are up 8.0% year-to-date, compared to the same period in 2016. National Association of Home Builders commentary on the numbers suggests “limited existing inventory and solid builder confidence” are encouraging additional building, and the builder association says “This is right in line with forecast despite some monthly noise in the data.”
Single-family starts jumped 10.6% in the West and rose 9.3% in the Northeast. The South, which accounts for over half of single-family starts, saw starts rise 7.2%.
Multifamily construction also rebounded in June, with starts of projects with five units or more jumping 15.4% to a 359,000-unit annual pace. Even with the June surge, though, multifamily starts are down 5% year to date after five consecutive months of decline.
Multifamily activity was up sharply in the Midwest and Northeast, but fell in the South, which Wells Fargo says “has seen an onslaught of new supply."