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Housing Starts Rise Sharply in June08-02-16 | News

Housing Starts Rise Sharply in June
Results Easily Eclipse Market Expectations

Single-family and multifamily combined rose in June, month to month, by almost 5 percent.

Housing starts rocketed upward in June, surging 4.8 percent versus May.

"The rise easily beat market expectations, which were weighed down by softer building permit data from prior months," the Wells Fargo Economics Group said.

Separately, single-family starts gained 4.4 percent month-over-month, while multifamily developments moved ahead 5.4 percent.

Single-family starts rose in all four regions of the U.S., and it soared in the Northeast by 31.6 percent.

Compared to a year ago, single-family starts have shot up 17.9 percent. "The gain should provide a boost to new home sales, which have been held back by a lack of supply," Wells Fargo's economists said. Multifamily projects, conversely, are down 3.9 percent year-over-year, as apartment building is showing signs of "topping out," despite huge gains in the West and Northeast, according to Wells Fargo.

"This month's uptick in production is an indicator that the housing market continues to move forward," said Ed Brady, chairman of the National Association of Home Builders. "At the same time, builders are adding inventory at a cautious pace as they face lot shortages and regulatory hurdles."

"The June report is consistent with our forecast for a gradual but consistent recovery of the housing market," said Robert Dietz, chief economist for the NAHB. "Single-family production should continue to strengthen throughout the year, buoyed by job growth, new household formations and low mortgage interest rates."

Permits for single-family and multifamily combined were up 1.5 percent in June, but are down 13.6 percent compared to a year ago, according to U.S. Census Bureau data.

Housing completions rose 12.3 percent for the month, and increased 18.7 percent year-over-year, the Census Bureau's report for June shows.