Led by solid single-family production, total housing starts increased 17.3% in June to a seasonally adjusted annual rate of 1.19 million units, according to a report from the U.S. Housing and Urban Development and Commerce Department.
The June reading of 1.19 million starts is the number of housing units builders would begin if they kept this pace for the next 12 months. Within this overall number, single-family starts increased 17.2% to an 831,000 seasonally adjusted annual rate, after an upward revision from the May estimate. The multifamily sector, which includes apartment buildings and condos, increased 17.5% to a 355,000 pace.
“Fueled in part by record low mortgage rates, builders are seeing solid demand for housing despite the challenges of the virus and elevated unemployment,” said National Association of Home Builders (NAHB) Chairman Chuck Fowke. “Demand is growing in lower density markets, including exurbs and small metros.”
“Single-family construction is expanding off April lows due to lean inventories of new and existing homes,” said NAHB Chief Economist Robert Dietz. “However, builders face challenges in growing costs, particularly rising prices for lumber.”
On a regional and year-to-date basis (January through June of 2020 compared to that same time frame a year ago), combined single-family and multifamily starts are 2.2% higher in the Midwest, 0.2% higher in the South, 2.9% higher in the West and 5.4% lower in the Northeast.
Overall permits increased 2.1% to a 1.24 million unit annualized rate in June. Single-family permits increased 11.8% to an 834,000 unit rate. Multifamily permits decreased 13.4% to a 407,000 pace.
Looking at regional permit data on a year-to-date basis, permits are 3.4% higher in the South, 8.8% lower in the Northeast, 2.3% lower in the Midwest and 3.9% lower in the West.