Housing starts up +6.3% in June. Supply issues stopping future builds from starting.
Single-Family Housing Starts Hit Third-Highest Number of Starts Since May 2006
Housing starts increased +6.3% to hit a total of 1.64M of both single-family and multifamily buildings.
Single-family starts came in at the rate of 1,160,000 during June, up from 1,091,000 in May. This is the third-highest number of housing starts in one month since May of 2006.
According to the most recent study from the US Census Bureau, housing starts in June were up +29% y/y…but remember that comparison is skewed due to the COVID pandemic.
Single-Family Completions Down in June
Not such great news is the fact that single-family completions came in at 902,000, down from May’s revised rate of 961,000.
Mathew Speakman, an economist with Zillow, said, “Construction activity could be even higher given a bit more long-term certainty and an easing of critical supply chain volatility. While lumber prices have fallen back to earth after the prolonged surge that began last spring, disruptions are now pushing up prices of other key building materials – including steel, concrete, and lighting, and making other important supplies very difficult to come by.”
Supply Chain Delays
Speakman highlighted supply chain disruptions and “multi-month delays “…in delivering windows, heating units, refrigerators, and other items builders need to complete new homes, forcing builders to cap activity.”
Speakman said, “June will go down as a very solid month, and also one symbolic of the month-to-month struggle that builders face.” Not only do builders have to build new housing units for buyers starving for inventory, builders have to dole out whatever supplies they have in order to meet their basic market demands.
Regional Starts
The Northeast and Midwest saw a drop in housing starts during June. The South and West both saw an increase. The West, specifically, saw an uptick of +13% in housing starts in June, the highest level of housing starts since February.
Country Still Badly Lacking in Housing Inventory
Despite June being good news for housing starts, the country as a whole continues to lack inventory. Realtor.com economist George Ratiu said that if there were homes to buy, regardless of price, people would buy them.
Ratiu said, “While construction companies work to balance lumber costs returning to earth with (ongoing) increases in labor and development costs, the market shortage of about four million homes remains an obstacle yet to overcome. Millions of buyers are eager and able to buy, if only they can find the right home at an affordable price.”
Thanks to US Census Bureau, Zillow, realtor.com and HousingWire.
