US housing starts declined 8.0% month-over-month to a seasonally adjusted annual rate of 1.434 million (consensus 1.475 million) in June. Higher financing costs are creating headwinds for builders and preventing activity from being stronger in a supply-constrained housing market. Single-family starts down in all regions except the West (+4.6%), following a downwardly revised 1.559 million (from 1.631 million) for May.
US building permits also decreased 3.7% month-over-month to a seasonally adjusted annual rate of 1.440 million (consensus 1.472 million). Permits for single-family units flat to positive in all regions, following an upwardly revised 1.496 million (from 1.491 million) for May. Affordability is the major issue overhanging; mortgage demand hovers near its lowest level since 1997. Single-unit starts are down 28.1% year-over-year and single-family permits being down 21.2% year-over-year.
The move suggests disruption and demographic influences.
The key indicator from the report has been the growth seen in single-family starts and single-family permits, a leading indicator which is needed given the limited supply of existing homes for sale. Both took a breather this month.
United States Housing Starts June 2023
- Total housing starts declined 8.0% month-over-month to a seasonally adjusted annual rate of 1.434 million (consensus 1.475 million) following a downwardly revised 1.559 million (from 1.631 million) for May.
- 8.1 percent (±9.2 percent)* below the June 2022 rate of 1,561,000.
- Single-family starts down in all regions except the West (+4.6%)
- Single‐family housing starts in June were at a rate of 935,000; this is 7.0 percent (±11.7 percent)* below the revised May figure of 1,005,000.
- Multi-units starts with five units or more was 482,000.
- Starts fell in the Northeast (-2.1% to 95k), in the Midwest (-33.1 % to 162k), in the South (-4.4 % to 838k) and in the West (-1.2 % to 339k).
The housing market has been rocked by high interest rates. It had been supported by low interest rates and increasing demand from people moving away from big cities due to the coronavirus crisis, but the momentum slowed with rising inputs amid supply constraints could limit production to ease a shortage of homes. Homebuilding activity has seen an adverse impact from sharply higher mortgage rates on buyer demand and builder sentiment. Further to rising mortgage rates, headwinds come from supply constraints and higher house prices. Rates are now sharply higher (over 6.7%).
United States Building Permits June 2023
- Building permits decreased 3.7% month-over-month to a seasonally adjusted annual rate of 1.440 million (consensus 1.472 million) following an upwardly revised 1.496 million (from 1.491 million) for May which was the highest level since October 2022.
- Permits for single-family units flat to positive in all regions,
- Single‐family authorizations in June were at a rate of 922,000; this is 2.2 percent above the revised May figure of 902,000.
- Authorizations of units in buildings with five units or more were at a rate of 467,000 in June.
- Permits were down in the South (-2.6 percent to 801k), West (-4.0 percent to 336k), and Northeast (-23.4 percent to 105k), but were up in the Midwest (5.9 percent to 198k)
Housing Completions
- Privately‐owned housing completions in June were at a seasonally adjusted annual rate of 1,468,000. This is 3.3 percent (±9.7 percent)* below the revised May estimate of 1,518,000, but is 5.5 percent (±11.0 percent)* above the
- June 2022 rate of 1,392,000. Single‐family housing completions in June were at a rate of 986,000; this is 2.8 percent (±10.2 percent)* below the revised May rate of 1,014,000.
- The June rate for units in buildings with five units or more was 476,000
Notice of methodology change: Beginning with the January 2022 New Residential Construction release on February 17, 2022, the monthly Building Permits Survey design will change from a representative sample to a cut‐off sample. This change will allow complete local and county data on new housing units authorized by permits to be published on a monthly basis going forward. For additional details on this change and the impact on New Residential Construction, see our FAQ document.
Source: US Census
From The TradersCommunity News Desk