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Economy in Brief

U.S. Housing Starts Fall Further in June
by Sandy Batten  July 19, 2022

• Starts level is lowest since September 2021.

• Building permits edged down to nine-month low.

• Single family starts and permits fell while multi-family rebounded.

Rising interest rates and home prices along with ongoing supply-chain problems continued to weigh on new residential construction in June. Housing starts declined 2.0% m/m (-6.3% y/y) in June to 1.559 million units at an annual rate following an upwardly revised 11.9% m/m decline in May (initially -14.4% m/m). The June reading was the lowest level of starts since September 2021. The Action Economics Forecast Survey had expected 1.585 million starts in June.

Single-family starts declined 8.1% m/m (-15.7% y/y) in June to 982,000 units at an annual rate, their fourth consecutive monthly decline, on top of a 9.0% m/m drop in May (revised up slightly from -9.2% m/m). By contrast, starts of multi-family units rebounded in June, rising 10.3% m/m (+15.6% y/y) to 577,000 units after an upwardly revised 17.2% m/m collapse in May (initially -23.7% m/m).

By region, housing starts were mixed last month. Starts in the Northeast increased 10.6% m/m in June on top of a 6.0% monthly rise in May. Starts in the West rose 3.7% m/m in June, but this fell far short of reversing the 18.2% monthly drop in May. By contrast, starts in the Midwest slumped 7.7% m/m in June, more than reversing their 6.4% monthly gain in May. And starts in the South declined 4.8% m/m in June on top of a 15.4% m/m plunge in May and their third monthly decline in the past four months.

Building permits edged down 0.6% m/m (+1.4% y/y) in June to 1.685 million units at an annual rate, their third consecutive monthly decline, following a 7.0% m/m decline in May. Permits to build single-family homes plunged 8.0% m/m (-11.4% y/y), their fourth consecutive monthly decline, following a 5.2% monthly drop in May. Again by contrast, permits to build multi-family units jumped up 11.5% m/m (+26.0% y/y) in June, their first monthly increase in three months, following a 9.8% m/m drop in May.

The housing starts and permits figures can be found in Haver's USECON database. The expectations figure is contained in the AS1REPNA database.

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