June New Home Construction Rate Remains Unchanged

WASHINGTON D.C. — Construction of new homes and apartments in June were unchanged from the previous month, according to a report released Tuesday by the Commerce Department.

Single-family housing starts in June 2005 were at a rate of 1.667 million, 2.5 percent below the May figure of 1.709 million. The June rate for units in buildings with five units or more was 302,000.

“Builders continue to build to meet very strong demand,” said Dave Wilson, president of the National Association of Home Builders (NAHB). “Mortgage rates, though they have risen slightly in recent weeks, are still very favorable and our surveys show that builders are confident that the market will stay strong in the months ahead.”

Privately-owned housing completions in June were at a seasonally adjusted annual rate of 1.953 million. This is 6.6 percent below the revised May estimate of 2.092 million, but 5.2 percent above the June 2004 rate of 1.857 million. Single-family housing completions in June 2005 were at a rate of 1.647 million, 5.1 percent below the May figure of 1.735 million. The June rate for units in buildings with five units of more was 276,000.

Privately-owned housing units authorized by building permits in June were at a seasonally adjusted annual rate of 2.11 million. This is 2.4 percent above the revised May rate of 2.062 million and is 4.8 percent above the June 2004 estimate of 2.014 million.
Single-family authorizations in June were at a rate of 1.649 million, 1.3 percent above the May figure of 1.628 million. Authorizations of units in buildings with five units or more were at a rate of 374,000 in June.

On a regional basis, the strength in June occurred in the South, where construction rose by 11.4 percent to an annual rate of 1 million units.

Construction was down in all other parts of the country last month, led by a 12.1 percent decline in the Midwest to an annual rate of 335,000 units. Construction in the West dropped by 10.4 percent to an annual rate of 481,000 units and was down 0.5 percent to an annual rate of 185,000 units in the Northeast.

“Demand, fueled by favorable mortgage rates, as well as strong household income and job growth in most regions, continues to drive the housing market,” said NAHB Chief Economist David Seiders. “High lot prices and land-use controls in many areas do constrain supply and are a concern for many builders.”