While single-family starts climb, permits faltered last month.
Residential construction continues to show momentum, despite home builders facing the hurdles of high material prices and supply chain shortages.
Housing starts in June were at a seasonally adjusted annual rate of 1.643 million, up 6.3% from the revised May estimate of 1.546 million, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development reported today.
Starts are also 29.1% above the June 2020 rate of 1.273 million.
Single-family starts climbed 6.3% in June to a rate of 1.16 million from the revised May single-family starts rate of 1.09 million.
But permits fell 5.1% to an adjusted annual rate of 1.598 million compared to the revised May rate of 1.683 million. Single-family permits declined 6.3% to a rate of 1.063 million from the revised May rate of 1.134 million.
The latest figures arrive a day after the National Association of Home Builders (NAHB) reported that builder confidence slipped in July. Additionally, the NAHB and industry leaders continue talks with the White House and the Biden Administration in hopes of finding a solution to high material prices and shortages.
“While lumber prices have just recently begun to trend downward, builders continue to deal with rising prices of other building materials, such as oriented strand board, and major delays in the delivery of these goods,” said NAHB Chairman Chuck Fowke. “We are thankful that the White House recently held a meeting to seek solutions to these supply chain issues that are harming housing affordability.”
Multifamily starts, which includes condos and apartments, increased 6.2% to a 483,000 pace last month. Multifamily permits decreased 2.6% to a 535,000 pace, however.
“The recent weakening of single-family and multifamily permits is due to higher material costs, which have pushed new home prices higher since the end of last year,” said NAHB Chief Economist Robert Dietz. “This is a troubling sign for future housing production. This is a challenge for a housing market that needs additional inventory.”
A snapshot of residential construction performance in June 2021.
Here’s how starts and permits performed on a regional basis:
In the Northeast, total starts fell 9% but single-family starts soared 34.4%. Permits fell 8.3% as single-family permits were down 8.5%.
In the Midwest, overall starts sank 7.5% as single-family starts tumbled nearly 20%. Permits declined 6.7% as single-family permits fell 5.8%.
In the South, combined starts are up 9.7% for June and single-family starts increased 13.7%. Permits decreased 3% as single-family permits were down 6%.
Total starts in the West ascended 12.6% as single-family starts showed no change. Permits are down 7.4% and single-family permits fell 6.5%.
The full Monthly New Residential Construction report for June 2021 is available here.