June experienced solid single-family production. According to the U.S Housing Development and Commerce Department, housing starts increased 17.3 percent to a seasonally adjusted rate of 1.19 million units.
Single-family starts increased 17.2 percent to a seasonally adjusted rate of 831,000, after an upward revision from May’s estimate. In the multifamily sector, condo and apartment building rates increased 17.5 percent to a 355,000 pace.
Regionally, overall housing starts (both single- and multi-family) are 2.2. percent higher in the Midwest, 0.2 percent higher in the South and 20.9 percent higher in the West. They’ve decreased 5.4 percent in the Northeast.
The Breakdown:
Housing Starts:Â 1.86 million (+2.1% month-over-month, -2.5% year-over-year)
Multifamily Permits: 368,000
Single-Family Permits: 834,000
Building Permits:Â 1.24 million (+17.3% month-over-month, -4.0% year-over-year)
Multifamily Permits: 350,000
Single-Family Permits: 831,000
Completions:Â 1.22 million (+4.3% month-over-month, +5.1% year-over-year)
Multifamily Completions: 311,000
Single-Family Completions: 830,000
What the Industry’s Saying
“The housing market is hot. Homebuyers have swiftly moved into the market to take advantage of the unimaginably low mortgage rates. But inventory is lacking with a sizable backlog of buyers getting outbid by others. More homes therefore need to be built to help relieve the housing shortage. The latest increase in housing starts of 1.186 million (17 percent gain) is only a bare, partial recovery after a shutdown. The country needs at least 1.5 million units. Building more homes also has an added benefit of boosting the local economic growth. In the meantime, expect multiple offers to be common on many mid-priced homes for the remainder of the year.” — Dr. Lawrence Yun, Chief Economist, National Association of REALTORS®
“Builders are clearly reading the market and understand the need for new homes to match overwhelming demand. While other segments of the economy may be stuttering, the housing market continues to be a bastion of hope. Today’s report indicates builders are confident consumers will purchase new homes in this era of rock-bottom mortgage rates, despite the high unemployment numbers and other negative economic reports.” — Bill Bankfield, Vice President of Capital Markets, Quicken Loans
“Fueled in part by record low mortgage rates, builders are seeing solid demand for housing despite the challenges of the virus and elevated unemployment. Demand is growing in lower density markets, including exurbs and small metros.” — Chuck Fowke, Chairman, National Association of Home Builders
“Single-family construction is expanding off April lows due to lean inventories of new and existing homes. However, builders face challenges in growing costs, particularly rising prices for lumber.” — Robert Dietz, Chief Economist, National Association of Home Builders
“Homebuilding continues to rebound from the sharp drop experienced in April due to the onset of the pandemic. Single-family housing starts in June were up strongly, but are still behind last year’s pace at this time. The growth in construction permits suggests building momentum in the months ahead. MBA’s Builder Applications Survey for June—released this week—showed that demand is running 54 percent ahead of last June, and NAHB’s latest Housing Market Index revealed rising builder confidence in future demand. This is positive, as the rebound in housing demand could be stymied if there is not more inventory on the market soon. Home prices have held up well thus far given the lack of supply, and we’re forecasting for home-price growth of 4 percent this year.” — Mike Fratantoni, SVP and Chief Economist, Mortgage Bankers Association
