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.”
Indeed, breaking down the Census numbers, it’s clear that multifamily permits and starts were the biggest contributors to the higher numbers. While single-family permits were up 0.2% month-over-month, five units or more were up 8.3%. Year-over-year, single-family permits were up 6.7%, but five-units or more permits were up 40.4%.
And under starts, single-family were up 9.4% in June over May and 16.7% year-over-year while five-units or more projects were up 31.8% sequentially and 104.8% yearly.
Regionally, the Northeast was down in permits issued in June by 10% from May and 2.8% from June 2010. In starts, however, the region climbed by 35.1% over May and 28.3% yearly. And most of those increases came in multifamily.
The Midwest was up 5.2% in permits from May and 4.5% from June 2010. Starts were up 25.3% over May and 45.9% over 2010.
The South was up 5.5% in permits over May and June 2010. Starts were up 10.6% over May and 2.1% year-over-year.
The West was up 1.4% month-over-month and 20.5% yearly in permits. Starts climbed 5.4% in June over May and 25.9% over June of 2010.
Teresa Burney is a senior editor for Builder magazine.