Nationwide housing production rose by 6.9 percent to a seasonally adjusted annual rate of 760,000 units in June, according to newly released figures from HUD and the U.S. Census Bureau. This is the fastest pace of new-home construction since October of 2008.
“This good report is in keeping with the results of our latest builder confidence survey, in which many of our members said that they are seeing an influx of more serious buyers to the new-homes market this summer,” observed Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. “What’s especially encouraging is that, as consumers realize the advantages of purchasing a newly built home while prices and interest rates are so favorable, builders are able to put more crews back to work on construction sites across the country. This in turn is helping spur local economic growth, and policymakers need to be very careful to not take any steps that would derail the beginnings of such a positive trend at this crucial time.”
“This is one more piece of evidence that housing is starting to take back its traditional role of leading the nation out of recession and tracks with our forecast for continued improvement in new construction through the end of this year,” said NAHB Chief Economist David Crowe. “While many challenges continue to weigh down the housing recovery – including those related to builders’ and buyers’ access to credit, poor appraisals and the number of distressed properties in certain markets – production of single-family homes is now the strongest it has been since 2010 due to rising consumer demand brought on by improving market conditions."
Single-family housing starts rose for a fourth consecutive month to a seasonally adjusted annual rate of 539,000 units in June, its fastest pace since April of 2010. Meanwhile, multifamily starts rose 12.8 percent to 221,000 units, in keeping with the solid pace of demand for rental units.
Regionally, combined single-and multi-family housing starts rose 22.2 percent in the Northeast and 36.9 percent in the West but fell back 7.3 percent in the Midwest and 4.2 percent in the South in June. However, the declines were entirely due to monthly volatility on the multifamily side, as single-family starts posted gains across every region in June.
Issuance of new building permits, which can be an indicator of future building activity, fell 3.7 percent to a seasonally adjusted annual rate of 755,000 units in June following a large increase in the previous month. While single-family permitting posted a marginal, 0.6 percent gain to 493,000 units, multifamily permitting fell back 10.9 percent to 262,000 units from an above-trend pace in the previous month.
On a regional basis, permit issuance rose 2.9 percent in the West and held unchanged in the Northeast, but retreated 0.8 percent in the Midwest and 8 percent in the South in June.