June Housing Starts: Still Sluggish

• June housing starts fell 0.9% from May to 1.25 million units (seasonally adjusted annual rate). They’re up 6.2% from a year ago, according to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development. Single‐family housing starts in June rose 3.5% from May and fell 0.8% from a year ago.
• June permits dropped 6.1% from May to 1.22 million and 6.6% from June 2018. Single‐family authorizations in June rose 0.4% from May and fell 4.7% from a year ago.
• June housing completions fell 4.8% from May and 3.7% from June 2018. Single‐family completions were at a rate of 870,000, 1.8% below May and rose 1.6% from a year earlier.

June was the fifth consecutive month in which single-family starts fell from the prior year. A sluggish first half of 2019 indicates that builders have so far not been as willing or able to put up as many new homes as the strong economy and milder summer weather might otherwise suggest. A dearth of affordable land and labor continue to weigh heavily on housing starts, headwinds that sustained low mortgage interest rates and a strong job market haven't overcome. The housing market moves slowly, and as the direct challenges faced at the start of the year – including a prolonged government shutdown and a late-2018 spike in mortgage rates – fade more fully into the rearview mirror, the back half of 2019 will start to look better. Already in today’s figures, there’s a year-over-year increase in total housing starts, including multi-family — up from a fairly weak June 2018. Construction payrolls were up in June, and the jump in housing permits in May indicates more starts on the horizon — although permits fell again in June.

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