Single-family housing starts were virtually unchanged from the previous month at a seasonally adjusted annual rate of 454,000 units in June, according to newly released figures by the U.S. Commerce Department. Meanwhile, a 21.5 percent decline on the more volatile multifamily side weighed down the overall housing production number, which fell five percent to a 549,000-unit rate.
“As our most recent member surveys have indicated, builders remain very cautious in light of the sluggish pace of the economic recovery and the hesitancy they are seeing among potential homebuyers,” said Bob Jones, chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich. “However, today’s report is actually somewhat encouraging, because it indicates that single-family production is stabilizing following an expected lull that occurred with the end of the homebuyer tax credit program.”
“The government’s figures suggest that single-family housing production may be finding a bottom following the tax credits,” said NAHB Vice President and Senior Economist Bernard Markstein. “Over the next several months, we expect to see some improvement in both housing starts and sales activity as buyers come forward to take advantage of the very attractive home prices, historically low mortgage rates and excellent selection that characterize today’s new-home marketplace. However, builders continue to confront significant challenges in obtaining financing for viable new projects, and this problem remains a formidable obstacle to economic growth.”
Nearly all of the five percent decline in housing production was on the multifamily side this June, which fell 21.5 percent to a seasonally adjusted annual rate of 95,000 units. Meanwhile, single-family starts hardly budged, with a 0.7 percent decline to 454,000 units. All four regions posted declines in overall housing production, with an 11.3 percent reduction in the Northeast, a 6.9 percent decline in the Midwest, a 2.4 percent decline in the South, and a 5.9 percent decline in the West.
Meanwhile, nationwide permit issuance, an indicator of future building activity, rose 2.1 percent to a seasonally adjusted annual rate of 586,000 units in June. While single-family permits fell 3.4 percent to 421,000 units for the month, that decline was due entirely to a drop-off in the South, with every other region holding steady or better on the single-family side. Multifamily permits rose 19.6 percent to a seasonally adjusted annual rate of 165,000 units in June. Combined single and multifamily permit issuance was up 32.3 percent in the Northeast, down 10.8 percent in the Midwest, down 3.1 percent in the South, and up 9.7 percent in the West in June.
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