Housing Starts and Permits Jump in June

Housing starts and permits were up in June, beating analysts' expectations, but still on track for a relatively weak year, according to the U.S. Census’ New Residential Construction report. The Census reported total housing starts at a seasonally adjusted annual rate of 629,000, 14.6% above the revised May estimate of 549,000 and 16.7% above the 539,000 in June of last year. Single-family housing starts were up 9.4% over May’s adjusted number at 453,000. The June rate for units in buildings with five units or more was 170,000. Total housing permit numbers were also up, surpassing analysts’ predictions, but weaker than starts. Privately owned housing units were at 624,000 on a seasonally adjusted annual rate, up 2.5% above May and 6.7% above June of last year’s 585,000. Permits for single-family homes, however, were virtually flat at a rate of 407,000, 0.2% above the revised May number. Housing completions in June were 535,000, below May’s 544,000 and 39.3% below June of 2010’s tax-credit boosted 881,000. Single-family completions were also flat at 436,000, equal to May. The June rate of completions for buildings with five units or more was 89,000. While the numbers offer some “modest positive sentiment,” Wells Fargo Security’s analyst Adam Rudiger sees less to be optimistic about. “From a single-family perspective, the increase in starts is more muted, at plus 9% sequentially, and year-over-year starts were flat, despite the lack of the tax credit benefit in the comparable period data,” he wrote in a note reviewing the numbers. Even more worrisome were the single-family permit numbers, which were flat month-over-month and down 3.8% from last year. “Over the last 10 years, actual single-family starts in January through June have represented an average of 52% of the year’s total single-family starts.” He wrote. "Based on year-to-date results, this would imply 412,000 single-family starts in 2011, down 12.5% year-over-year.”

Click here to view this article from its source.