Privately-owned housing starts in June were at a seasonally adjusted annual rate of 1,174,000, up 9.8% (±19.9%) above the revised May estimate of 1,069,000 and is 26.6% (±19.6%) above the June 2014 rate of 927,000, according to the U.S. Census Bureau and the Department of Housing and Urban Development.
Most of the gains in starts and permits were in multifamily, not single-family contruction.
But the problem is single-family housing starts in June were at a rate of 685,000, 0.9% (±11.5%) below the revised May figure of 691,000. The June rate for units in buildings with five units or more was 476,000.
“While the rise in housing starts was driven by an uptick in multifamily housing, there are positive signs looming for the single-family housing market,” said Bill Banfield, vice president at Quicken Loans. “Homebuilder confidence is at its highest level in almost a decade and the number of first-time homebuyers looking to enter the market is increasing – making programs like FHA even more vital to support continued growth.”
Privately-owned housing units authorized by building permits in June were at a seasonally adjusted annual rate of 1,343,000. This is 7.4 % (±1.2%) above the revised May rate of 1,250,000 and is 30.0 % (±2.3%) above the June 2014 estimate of 1,033,000.
“Housing construction has nearly returned to pre-recessionary levels, as builders ramped up activity on multi-family projects including condos and co-ops,” saidStifel Chief Economist Lindsey Piegza. “While builders and lenders benefit regardless of the type of construction, the economic benefit, however, is significantly greater from single family construction as opposed to multi-family units, particularly rental properties; single family housing activity results in additional spending and borrowing power as a result of equity building which is not necessarily present in multi-family properties.
“The housing market continues to take steps in the right direction, however, growth remains far from robust; as we have seen in the recent decline in retail sales, consumers continue to struggle to afford purchases – particularly large ticket items – amid stagnant income growth,” she said. “Still, with the threat of rising rates on the near horizon, some homeowners are jumping in to lock in low rates. As we saw during the taper tantrum of 2013, despite a still-sluggish ability to finance a home purchase, many potential homeowners are willing to jump into the market sooner than later if it means avoiding a significantly higher mortgage rate.”
Single-family authorizations in June were at a rate of 687,000; this is 0.9 % (±1.1%) above the revised May figure of 681,000. Authorizations of units in buildings with five units or more were at a rate of 621,000 in June.