The June pace of single-family housing starts increased over a downwardly revised May reading, standing at a seasonally adjusted annual rate of 778,000 according to estimates from the Census Bureau and the Department of Housing and Urban Development. The June rate marks a 13% gain in the pace of single-family construction on a year-over-year basis.
Multifamily starts were up slightly in June, rising to 411,000 starts. However, on a year-to-date basis, multifamily construction for five-plus unit properties is down almost 4%.
Taken together, these trends are consistent with the NAHB forecast, which sees gathering strength for single-family construction and a leveling off of multifamily production as the market finds a balance between housing demand and supply.
Regionally, single-family starts jumped in the Northeast in June, rising 32% on a monthly basis. The Midwest also showed strength, increasing to a monthly pace that is 20% higher than that recorded a year ago. Single-family starts were up 3% in the West and effectively flat in the South.
Taking the long view, an examination of the count of homes currently under construction provides the degree of market mix and momentum of the recovery in home construction. As of June, 57% of units under construction in the nation were multifamily (583,000), a 13% gain in the total from a year earlier.
There were 432,000 single-family homes under construction in June, which is 15% higher than June 2015. This is the highest count since October 2008 and is an indicator that growth in home construction is a key bright spot in the overall economy, given the lackluster GDP measure for the first quarter.