Housing Starts Fall Enough to Break 3yr Trend of Improvement

All three residential construction indicators fell in June according to the U.S. Census Bureau and the Department of Housing and Urban Development.  Housing permits and housing starts were down for the second month in a row and completions, which increased in May, also fell.

Permits for residential construction were issued as a seasonally adjusted annual rate of 963,000 units, a decrease of 4.2 percent from the May rate of 1,005,000.  The May rate was revised upward from the 991,000 pace originally reported.  June permitting was 2.7 percent higher than the June 2013 rate of 938,000.

Permits for single family units were issued at a rate of 631,000, 2.6 percent higher than in May and up 0.6 percent from the 627,000 rate a year earlier.   The May number was revised to 615,000 from 619,000.  Permits for units in buildings with 5 or more were issued at an annual rate of 301,000 compared to 363,000 in May.

On a non-seasonally adjusted basis there were 91,400 permits issued in June compared to 92,200 in May and 85,700 a year earlier.  There were 60,800 single family permits issued during the month.

Residential construction starts in June were at a seasonally adjusted annual rate of 893,000 units.  This was a 9.3 percent reduction from the May rate of 985,000 but 7.5 percent higher than the 831,000 estimate for starts in June 2013.  The May rate was adjusted down from the original estimate of 1,001,000 units.

Single family starts were at a rate of 575,000 units, down 9.0 percent month-over-month and 4.3 percent year-over-year.  The original estimate of 624,000 starts in May was revised upward to 632,000.  Multifamily unit starts were estimated at 305,000 compared to 344,000 the previous month.

Non-seasonally adjusted starts in June totaled 85,200 of which 58,500 were single family units.  There were 93,200 total starts and 60,900 single family starts in May. 

Completions were at a seasonally adjusted annual rate of 789,000 compared to 897,000 in May, a 12.0 percent decline.  The June rate was 3.4 percent higher than the rate of completions a year earlier, 763,000.  Single family units were completed at a rate of 586,000 units compared to 627,000 in May, a decline of 6.5 percent, and 541,000 the previous June, an 8.3 percent increase.  Multifamily completions were at a rate of 198,000 units, down 23 percent from the previous month.

On an unadjusted basis there were units 69,200 units completed during the month, 50,700 of which were single family units.  The previous month there were 73,200 units completed, 52,500 single family.

Permits in the Northeast were down 15.5 percent from May and 6.7 percent from June 2013. Housing starts rose 14.1 percent from the previous month and were up 22.1 percent on an annual basis.  Completions were down 37.6 percent after a better than 75 percent increase in May.  The June rate of completions was 2.8 percent higher than a year earlier.

In the Midwest the rate of permitting was 6.6 percent higher than the previous month and up 21.9 percent year-over-year. Starts increased by 28.1 and 79.5 percent respectively.  Completions were virtually unchanged from May but were up 31.3 percent from a year earlier.

The annual rate of permitting in the South was down 6.3 percent and 1.3 percent from the two earlier periods and starts fell by 29.6 percent and 10.5 percent.  Completions declined 6.5 percent but were unchanged from the rate in June 2013.

In the West there was a slight decrease in permitting of 1.8 percent compared to May and an increase of 2.8 percent from June 2013. Starts were up 2.6 percent from May but were 4.9 percent lower than a year earlier.  Completions were down 16.8 percent and 6.3 percent for the month and year respectively.

At the end of the reporting period there were an estimated 758,000 residential units under construction, 340,000 of which were for single family dwellings. There were also 116,800 outstanding permits for which construction had not yet begun, 59,900 of which were for single-family units.