Key Highlights
- New home construction hops +17.3% in June, according to report by US Census Bureau
- Single-family starts jumped up +17.2$ in June
The US Census Bureau indicated in its latest report that new home construction skyrocketed +17.3% in June.
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Doug Duncan, chief economist with Fannie Mae, said, “Continued strong home purchase demand driven by historically low mortgage rates and tight inventories of existing homes for sale should support near-term single-family construction.”
Along with this rebound in new home construction as well as the addition of new construction jobs, single-family starts increased +17.2% month-over-month. Additionally, building permits increased +2.1% m/m to an annual rate of 1.24M. Multi-family permits slowed to a rate of 368,000 in June, a decrease from 434,000 permits in May.
Housing completions increased by +4.3% in June to a seasonally adjusted rate of 1.23M, +5.1% higher than the June 2019 rate of 1.17M.
Duncan’s only cautionary comment about this jump in new home construction centered on building material costs. In recent weeks, including July, “…the price of lumber reached levels not seen since the surge of 2018.”
The National Association of Home Builders (NAHB) and Wells Fargo’s collaborative monthly survey titled The Housing Market Index indicated that builder confidence in the market of building single-family homes increased +21 points in June to a score of 58. (Any point score reading over 50 indicates a positive market.)
Robert Dietz, chief economist with the NAHB, said, “Housing clearly shows signs of momentum as challenges and opportunities exist in the single-family market. Builders report increasing demand for families seeking single-family homes in inner and outer suburbs that feature lower density neighborhoods. At the same time, elevated unemployment and the risk of new, local virus outbreaks remain a risk to the housing market.”
Thanks to the National Association of Home Builders, the US Census Bureau and HousingWire.
Also read: Mortgage Defaults Could Dwarf Those in 2008, Will Housing Recession-Proof the Economy in 2020?, Builder Confidence & Mortgage Purchase Application Up
