Single-Family Starts Hold Steady as Multifamily Drops

The U.S. Census Bureau reported that housing starts were at a seasonally adjusted annual rate of 836,000 for June, a 9.9% slower pace than May but 10.4% higher than one year ago.

The month-over-month decline in housing starts largely reflected a 26.2% decrease in multifamily starts, which came in at a seasonally adjusted annual rate of 245,000 in June.

Single-family housing starts, which accounted for 71% of all housing starts in June, were generally flat. Between May and June single-family starts fell by 0.8% to a seasonally adjusted annual rate of 591,000. Over the past twelve months, single-family housing starts are up 11.5%.

Multifamily housing starts typically experience month-to-month volatility. On a 3-month moving average basis, which smoothes the volatility, multifamily housing starts have been generally declining since March, with the three month moving average having fallen by 15.0% over the period.

Going forward, single-family starts should continue to grow, consistent with the recent rise in the NAHB/Wells Fargo Housing Market Index, a measure of single-family builder confidence. NAHB forecasts that single-family construction will be up 20% for 2013. Future data will provide a clearer picture of the growth prospects of the multifamily sector.

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