Home starts rise 5% in June; home builders report “scattered softness” in market

Updated Aug 16, 2016

House home construction site prepU.S. home starts rose nearly 5 percent in June on gains in both single- and multi-family residences.

Total starts rose 4.8 percent to a seasonally adjusted annual rate of 1.189 million, according to preliminary data from the Commerce Department. However, total starts are down 2 percent from the June 2015 rate.

Single-family home starts were up 4.4 percent to a rate of 778,000 and are up 13.4 percent over the year-ago figure. Multi-family starts rose 1.6 percent to a rate of 392,000, but are down 23.6 percent year over year.

Building permits, a good barometer of how the homebuilding industry is trending, rose 1.5 percent during June to a rate of 1.153 million. Permits are 13.6 percent below the June 2015 estimate.

Builder confidence in the housing market is down slightly, according to the July edition of the National Association of Home Builders/Wells Fargo Housing Market Index. The index fell one point to a 59. Any reading above a 50 indicates most home builders believe market conditions are good.

“For the past six months, builder confidence has remained in a relatively narrow positive range that is consistent with the ongoing gradual housing recovery that is underway,” says NAHB chairman Ed Brady. “However, we are still hearing reports from our members of scattered softness in some markets, due largely to regulatory constraints and shortages of lots and labor.”

“The economic fundamentals are in place for continued slow, steady growth in the housing market,” adds NAHB chief economist Robert Dietz. “Job creation is solid, mortgage rates are at historic lows and household formations are rising. These factors should help to bring more buyers into the market as the year progresses.”