New Home Construction Rises to Four-Year High, New Permits Decline Slightly

In May, new building permits rose sharply to a revised 784,000. The June report issued today indicated that new permits fell by 3.7% to 755,000. Permits for single-family units rose 0.6% month-over-month in June, and permits for structures with more than four units fell by 11.4%.

Year-over-year, single family building permits rose 19.7%, while permits for multifamily structures of more than four units rose by 21.7%. Total new permits were up 19.3% year-over-year in June.

Construction starts rose 23.6% year-over-year, with single family units rising 21.7% and structures with more than four units rising 29.1%. Construction starts on multifamily buildings rose 17% month-over-month and 29.1% over June 2011.

Multifamily construction starts are quite volatile, ranging from a high this year of 240,000 in February to a low of 179,000 in May. The total for June was 213,000.

Of the 760,000 construction starts in June, about 71%, or 539,000, were single-family units. That is down slightly from 72.4% in May.

Paul Ausick