Single-family housing starts in June were at a rate of 858,000, according to new data
from the U.S. Census Bureau and the Department of Housing and Urban Development. This is 9.1 percent below the revised May figure of 944,000. Privately-owned housing starts in June were at a seasonally adjusted annual rate of 1,173,000, which is 12.3 percent below the revised May estimate of 1,337,000 and 4.2 percent below the June 2017 rate of 1,225,000.
Single-family authorizations in June were at a rate of 850,000, up 0.8 percent above the revised May figure of 843,000. Privately-owned housing units authorized by building permits in June were at a seasonally adjusted annual rate of 1,273,000, which is 2.2 percent below the revised May rate of 1,301,000 and three percent below the June 2017 rate of 1,312,000.
Single-family housing completions in June were at a rate of 862,000, which is 2.3 percent below the revised May rate of 882,000. Privately-owned housing completions in June were at a seasonally adjusted annual rate of 1,261,000, which is unchanged from May and 2.2 percent above the June 2017 rate of 1,234,000.
“New single-family building permits, which are the leading indicator of construction of new homes, rose by 4.6 percent in June–the second lowest growth rate in 2018. There’s been a noticeable slowdown in single-family permit activity this year, and especially the last four months, which have had two of the three lowest readings over the last three years," said Freddie Mac
Chief Economist Sam Khater. "It’s alarming that the single-family construction permit growth is decelerating at a time when homeownership is rising and Millennials are reaching their peak age to really enter the market and buy their first home. The growing imbalance between demand and supply is the reason home prices continue to escalate.”
The Refinance Index increased two percent from the previous week
and the refinance share of mortgage activity increased to 36.5 percent of total applications from 34.8 percent the previous week. Among the federal programs, the FHA share of total applications increased to 10.6 percent from 10.0 percent the week prior while the VA share of total applications decreased to 10.2 percent from 11.3 percent and the USDA share of total applications decreased to 0.7 percent from 0.8 percent.
“One of the surprising developments this year is that multi-family construction has remained at or above the seasonally adjusted annual rate of 400,000 units," said Genworth Mortgage Insurance
Chief Economist Tian Liu. "This comes at a time when housing demand is shifting from apartments to owner-occupied single-family housing, which is already leading to a slowdown in rental growth. Despite challenges such as higher material costs and labor shortages, the shift in demand towards homeownership and the lack of available inventory of existing homes for sale continue to drive single-family housing starts.”