New Home Construction Rises to Four-Year High, New Permits Decline Slightly

The monthly report from the U.S. Census Bureau and the Department of Housing and Urban Development shows that new housing starts totaled a seasonally adjusted annual rate of 760,000 units in June, a rise of 6.9% compared to a revised rate of 711,000 in May, and higher than a consensus estimate of 750,000 new starts. The June rate represents the highest number of new housing starts in the United States since October 2008.

In May, new building permits rose sharply to a revised 784,000. The June report issued today indicated that new permits fell by 3.7% to 755,000. Permits for single-family units rose 0.6% month-over-month in June, and permits for structures with more than four units fell by 11.4%.

Year-over-year, single family building permits rose 19.7%, while permits for multifamily structures of more than four units rose by 21.7%. Total new permits were up 19.3% year-over-year in June.

Construction starts rose 23.6% year-over-year, with single family units rising 21.7% and structures with more than four units rising 29.1%. Construction starts on multifamily buildings rose 17% month-over-month and 29.1% over June 2011.

Multifamily construction starts are quite volatile, ranging from a high this year of 240,000 in February to a low of 179,000 in May. The total for June was 213,000.

Of the 760,000 construction starts in June, about 71%, or 539,000, were single-family units. That is down slightly from 72.4% in May.

Paul Ausick