Single-family housing starts in June were at a rate of 778,000, up 4.4 percent from the revised May figure of 745,000, according to new numbers from the U.S. Census Bureau and the Department of Housing and Urban Development. Privately-owned housing starts were at a seasonally adjusted annual rate of 1,189,000, which is 4.8 percent above the revised May estimate of 1,135,000 but two percent below the June 2015 rate of 1,213,000.
Single-family authorizations in June were at a rate of 738,000, a one percent uptick from the revised May figure of 731,000, while privately-owned housing units authorized by building permits were at a seasonally adjusted annual rate of 1,153,000, up 1.5 percent from the revised May rate of 1,136,000 but down 13.6 percent from the June 2015 estimate of 1,334,000.
Single-family housing completions in June were at a rate of 752,000, which 3.7 above the revised May rate of 725,000, while privately-owned housing completions in June were at a seasonally adjusted annual rate of 1,147,000, an increase of 12.3 percent from the revised May estimate of 1,021,000 and a 18.7 percent spike from the June 2015 rate of 966,000.
Separately, CoreLogic is reporting that distressed sales, including REO and short sales, made up 8.8 percent of total home sales in April, down 1.7 percent from the previous month and three percent from a year earlier. All but seven states experienced low year-over-year distressed sales shares, with Maryland (19.5 percent), Connecticut (18.6 percent) and Michigan (18.1 percent) recording the highest level; North Dakota had the smallest distressed sales share at 2.4 percent. Among the major metro areas, the largest shares of distressed sales were in Baltimore (19.5 percent), Chicago (18.5 percent) and Florida’s Tampa-St. Petersburg-Clearwater corridor (17.9 percent).
In related news, the latest S&P/Experian Consumer Credit Default Indices found the first mortgage default rate in June at 0.65 percent, up slightly from May’s 0.63 percent level, while the second mortgage default rate dipped from 0.51 percent in May to 0.48 percent in June.
David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices, warned that the near future for consumer debt might be more than a little challenging. “The S&P/Experian Consumer Credit Default Indices covering mortgages and auto loans are within a few basis points of the lowest levels seen in 12 years, while the bank card default index is only 62 basis points above its low,” he said. “Despite the low default rates and positive economic conditions, some factors hint of future default rate increases. First, the bank card default rates have risen over the last 11 months and consumers continue to apply for additional accounts. Second, personal income growth is weak, only slightly ahead of inflation. At some point, inflation will move back to the Fed’s two percent target or higher and interest rates could even creep up—events that could strain consumers unless gains in wages accelerate.”
