New Housing Starts, Building Permits Drop in June

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The U.S. Census Bureau and the Department of Housing and Urban Development reported this morning that new housing starts in June fell to an annual seasonally adjusted rate of 836,000, a decrease of 9.9% from the upwardly revised May rate of 928,000 and a gain of 10.4% above the June 2012 rate of 757,000. The consensus estimate from a survey of economists expected a rate of around 928,000.

The seasonally adjusted rate of new building permits fell to 911,000, which is 7.5% below the upwardly revised May rate of 985,000 and 16.1% higher than the June 2012 rate of 785,000. The consensus estimate called for 985,000 new permits.

Single-family housing starts fell slightly to an annualized rate of 591,000 in June, down 0.8% from the downwardly revised May rate of 596,000.

Permits for new single-family homes rose 0.6% in June, to an adjusted annual rate of 624,000, from an upwardly revised total of 620,000 in May.

The drop in new housing starts is virtually entirely due to a sharp fall in buildings with five or more units. In May, multiple-unit construction rose from 244,000 starts in April to 322,000. The June count slipped to 236,000, a drop of 26.7%. Year over year, construction starts on multiple family buildings are up 7.8%.

The National Association of Homebuilders (NAHB) yesterday reported a six-point rise in builder confidence in July, noting that low inventory levels are encouraging builders once again to ramp up construction.

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