Single-family housing starts in June fell to 980,000 seasonally adjusted annual rate, a 2.2% decrease from May’s revised figure of 1,002,000. This decline is part of a broader trend affecting the housing market, despite an overall increase in total housing starts for the month, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
Overall, privately-owned housing starts reached 1,353,000 in June, marking a 3.0% increase from May’s revised estimate of 1,314,000. However, this total remains 4.4% lower than the June 2023 rate of 1,415,000.
Lower single-family starts are in line with the latest industry surveys conducted by the National Association of Home Builders, which show that builders are concerned about the current high interest rate environment. With better inflation data, the Federal Reserve is expected to begin rate reductions later this year. An improving interest rate environment will help buyers as well as builders and developers who are contending with tight lending conditions and high interest rates. And with total (new and existing) home inventory at a relatively low 4.4 months’ supply, builders are prepared to increase production in the months ahead. NAHB survey data of forward-looking builder sales expectations saw a gain in July.
Building permits, an indicator of future housing starts, showed mixed results in June. The seasonally adjusted annual rate for privately-owned housing units authorized by building permits in June was 1,446,000, up 3.4% from May’s revised rate of 1,399,000 but 3.1% below the June 2023 rate of 1,493,000. Single-family authorizations dropped by 2.3% to 934,000, down from May’s revised figure of 956,000.
Housing completions in June totaled 1,710,000, a 10.1% increase from May’s revised estimate of 1,553,000 and 15.5% above the June 2023 rate of 1,480,000. Single-family housing completions saw a slight increase of 1.8%, reaching 1,037,000 from May’s 1,019,000.