Home builders are ramping up the pace of new-home construction in response to an ongoing shortage of homes for sale across the country.
Housing starts nationwide jumped 8.3 percent in June to a seasonally adjusted annual rate of 1.22 million units, the Commerce Department reported Wednesday. Single-family production zoomed to its second highest rate of this year, increasing 6.3 percent month-over-month to a seasonally adjusted annual rate of 849,000 units. Multifamily starts also rebounded last month, posting a 13.3 percent increase to 366,000 units.
“We are seeing housing production return to trend after a softer reading last month,” says Robert Dietz, chief economist for the National Association of Home Builders. “The gradual growth in single-family starts in 2017 is in line with our forecast, and we should see this sector continue to strengthen throughout the year as consumers show interest in the housing market.”
Single- and multifamily housing production rose by the highest percentage in the Northeast in June, skyrocketing 83.7 percent month-over-month. Gains were also recorded in the Midwest with a 22 percent month-over-month increase in production and a 1.6 percent increase in the West. The South was the only major region in the U.S. to post a decrease in housing production last month, with starts dropping 3.8 percent.
The upswing in housing construction will likely continue in the coming months. Housing permits—a gauge of future construction—also posted an increase in June, up 7.4 percent to a seasonally adjusted annual rate of 1.25 million units. Broken out, single-family permits rose 4.1 percent to 811,000 units and multifamily permits increased 13.9 percent to 443,000.
“Though a recovery in housing starts in June is welcome news, more consistent gains are needed to help rebalance the housing market,” Lawrence Yun, chief economist of the National Association of REALTORS®, said
in a statement. “The latest 1.22 million in total housing starts is still well below the historical average of 1.5 million. That is why the country is experiencing a stubborn housing shortage. With rising population and steady job gains, drastically more new home construction is needed to fully and satisfactorily house new households that will be formed this year and upcoming years.”
Source: National Association of Home Builders
