Thursday, July 17, 2014

Housing Starts Dropped 9.3% in June, Record Decline in South

Housing starts in June are at their slowest pace since September 2013 and saw the biggest monthly decline in 5 months. Notably, the decline was concentrated in the South. The South fell 29.6%, a record monthly decline. The Midwest and Northeast saw strong growth. Starts in the West grew modestly. The decline in residential GDP investment helps explain the housing start decline, as a lack of investment in the first quarter creates fewer housing starts in the second quarter.

New residential construction slowed in June, reaching an annual rate of 893,000 units, down from a revised 985,000 in May. April was revised down as well. Housing starts are currently running 7.5% above their pace one year ago. Both multi-family and single-family starts contributed to June’s decline. Multi-family starts declined 9.9% over the month and single-family declined 9.0% over the same period.

Permit issuance was also weaker in June, declining 4.2%. Multi-family permit issuance declined 14.9%. Single family permit issuance was a bright spot, rising 2.6% over the month to a pace of 631,000 permits per year.

Despite the weak June report, overall the second quarter improved from the first quarter. Housing starts remain well below the long-run average of 1.5 million units.

Read the Census report.

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