According to figures released by the research department of the Bank of Federal Reserve Philadelphia, June housing permits in Delaware and New Jersey show new builds well above the national average, up 26.6% and 43.5% respectively. According to the June 2010 Census Bureau release, residential units authorized by building permits from May to June also increased in Pennsylvania by 11.4%, below the national housing permits increase of 15.4% for the month. The Philly Fed monitors permits in the three-state region. Over the past 12 months, permits in the nation declined 1.1 percent. Year-over-year, housing permits in the three states also increased; in Delaware by 24.1%, New Jersey, 43.2%, and Pennsylvania 27.6%. “To remove the seasonality and monthly volatility in permits, we apply a seasonal adjustment and a three-month moving average to total permits,” according to a statement by the Philly Fed. “According to our seasonally adjusted moving-average series, total permits fell in all three states and the nation from May to June. Residential construction remains weak compared with the past decade, and the modest pace of growth present in the early part of 2010 faltered somewhat in June.” The multifamily sector experienced a sharp swing in June, with a double-digit drop in starts and a double-digit increase in new permits. Some have questioned the future performance of the sector, including a Credit Suisse report that said while real estate investment trusts (REITs) that specialize in apartment buildings are far exceeding other types of REITs in 2010, a number of headwinds may slow the sector’s continued momentum for the rest of the year. In addition, Fitch Ratings reported that in June, the multifamily delinquency rate for commercial mortgage-backed securities (CMBS) rose to 13.82%, from 13.65% in May. Write to Jacob Gaffney. The author holds no relevant investments.
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