Privately owned housing starts in June showed an increase from May, but decreased from June 2015, according to the U.S. Department of Housing and Urban Development.
June housing starts were at a seasonally adjusted annual rate of 1,189,000, an increase of 4.8% from May’s revised estimate of 1,135,000, but a decrease of 2% from last year’s 1,213,000.
Of those, single-family housing starts in June came in at a rate of 778,000, an increase of 4.4% from May’s revised figure of 745,000.
“June’s data release shows monthly starts are still about 20% below historical averages,” Trulia Chief Economist Ralph McLaughlin said. “Similarly, our new study finds the rate at which new housing is supplied relative to demand is about 15% below historical norms.”
Additionally, privately owned housing units authorized by building permits in June hit a seasonally adjusted annual rate of 1,153,000. This is a 1.5% increase from May’s revised rate of 1,136,000 but is 13.6% below last year’s 1,334,000.
Of these, single-family authorizations in June were at a rate of 738,000, 1% above May’s revised figure of 731,000.
“While restrictive zoning regulation is often named as public enemy number one, our latest research suggests delays in permit approval better explains why new supply is abundant in some areas and stingy in others,” McLaughlin said. “This is because zoning can be changed, while uncertainty over project approval cannot.”
On the other hand, privately owned housing completions in June hit a seasonally adjusted annual rate of 1,147,000. This is not only a 12.3% increase from May’s revised 1,021,000, but also a 18.7% increase from last year’s 966,000.
Of those, single-family housing completions in June increased 3.7% from May’s revised rate of 725,000 to 752,000 in June.
“Although housing starts saw a solid rise in June, the bigger picture is that there has been no sustained upward progress in homebuilding activity for over a year now,” Capital Economics Property Economist Matthew Pointon said.
“But we suspect that as credit conditions ease very gradually, builders will shift their focus to cheaper, single-family properties,” Pointon said. “That should help starts to regain their lost momentum.”
Click to Enlarge