Building permits and housing starts both declined in June according to data released this morning by the U.S. Census Bureau and the Department of Housing and Urban Development. At the same time May data was revised higher for most variables. The new residential construction data may somewhat dampen the industry's growing enthusiasm over the last few weeks based on rising sales and prices. That enthusiasm was most strongly evidenced yesterday by strong positive results from the most recent National Association of Home Builders (NAHB) Housing Market Index (HMI), a measure of home builder confidence, which shot up six points in July to a seven-year high.
Building permits fell 7.5 percent from a seasonally adjusted rate of 985,000 in May to 911,000 in June. The May rate reflected an upward revision from the 974,000 originally reported. The June rate is 16.1 percent higher than one year earlier when permits were issued at an annual rate of 785,000. Permits for single-family construction were up a slight 0.6 percent to 624,000 units from a revised 620,000 units in May (originally reported at 622,000) and were 24.6 percent above the pace in June 2012. Permits for construction of units in building with 5 or more units fell to 261,000 from 338,000 units in May, a decline of 22.8 percent.
Housing starts fell 9.9 percent from a revised 928,000 units in May to a rate of 836,000 in June. May's housing start figure was originally reported at a 914,000 unit rate. The June figure was 10.4 percent higher than in June 2012, a rate of 757,000 units. Single-family starts were at a rate of 591,000, down 0.8 percent from May's 596,000 (revised from 599,000) pace. Starts in multi-unit buildings were at a rate of 236,000, down 26.7 percent from May.
Housing completions were up, rising 6.3 percent to a seasonally adjusted rate of 755,000 from a revised estimate of 710,000 (from 690,000) in May. The recent rate is 20.2 percent higher than completions one year earlier which were at the rate of 628,000.
At the end of the reporting period there were 102,100 permits that had been authorized nationwide but for which construction had not yet started. This number is unchanged from May as is its distribution among single-family permits (54,000) and multi-family (46,000) and virtually unchanged across regions with more than half of the outstanding permits located in the South. There were 624,000 units under construction at the end of the period compared to 621,000 in May.
Permits in the Northeast were up 3.9 percent from May and 32.1 percent year-over-year. Housing starts fell 12.1 percent month-over-month but were up 20.5 percent from June 2012.
The Midwest saw permits fall 4.6 percent from May but rise 19.7 percent from a year earlier. Starts were down 7.4 percent for the month but were running 29.9 percent ahead of June 2012.
In the South permits fell 11.2 percent from the previous month and housing starts fell 12.0 percent. Permits and starts were up 13.3 percent and 14.9 percent respectively from June 2012.
Permits were issued in the West at a rate 7.2 percent below that of May and 12.6 percent higher than a year earlier while housing starts were down 5.4 percent an 9.9 percent from the two earlier periods.