EmailNew housing starts exceeded expectations in June, rising from 549,000 in May to 629,000 in June. The Briefing.com consensus expected housing starts to increase to 570,000.
That is the highest number of new housing starts since January when a surge in volatile multifamily construction inflated the totals. This time, however, growth was equally weighted between the relatively more stable single-family and multi-family sectors.
Normally, solid growth in the single-family sector would provide evidence that the monthly increase in starts was not the result of a one-time surge. However, builders and contractors noted in previous construction reports that poor weather in April and May delayed some construction projects until June. This could explain the notable jump in June starts.
Even though the growth in starts may be due to special factors, it is important to note that the number of homes currently under construction increased from 415,000 in May to 419,000 in June. While the growth may look modest, it is the first time since May 2006 that the number of homes under construction increased on a monthly basis.
It is still too early to call a bottom in the housing construction sector, but continued expansion in the number of units under construction would support the notion. This suggests that builders not only want to increase their inventory levels, but it also shows that they believe demand for new homes will rebound in the latter half of the year.
