6/18/2007
Regis J. Sheehan & Associates
The new housing construction market continues to struggle. Housing starts increased slightly in June, but permits fell significantly, according to Robert Sheehan, consulting economist for the National Apartment Association.
“The rate of starts in June was up 2.3 percent, but total permit activity fell 7.5 percent,” Sheehan said. “Most of the change occurred in the multifamily sector which can be volatile from month to month.”
The housing starts rate for June was estimated at a 1.467 million unit seasonally adjusted annual rate, according to the U.S. Department of Commerce, versus a downwardly revised 1.434 million unit rate for May. Single-family construction was essentially unchanged with a 0.2 percent decline to a 1.151 million unit rate from 1.153 million a month earlier. Apartment (units in structures with 5 or more units) starts increased 12.9 percent to a 281,000 unit rate from 249,000 in May. Total multifamily construction starts rose 12.5 percent to a 316,000 unit rate in June from the 281,000 unit rate a month earlier.
Housing starts were mixed regionally. Starts increased 9 percent in the West to a 352,000 unit rate and 2.4 percent in the South to a 721,000 unit rate. They declined 2.4 percent in the Northeast to a 161,000 unit rate and were off 3.7 percent in the Midwest to a 233,000 unit rate.
Building permit activity fell to a 1.406 million unit annual rate in June from the 1.520 million revised rate for May. Single family permits declined 4.1 percent to a 1.019 million unit rate from 1.063 million. Total multifamily permits were issued at a 387,000 unit rate in June down 15.3 percent from the 457,000 rate in May. Permits for apartments were issued a 335,000 unit rate in June, a 14.8 drop from the 393,000 unit rate for May.
Housing starts during the first half of this year were down 26 percent a total of 729,300 units from the 984,900 units over the same period in 2006. Single-family starts were down 27.5 percent to 591,200 units from 815,100 units a year earlier. Total multifamily starts declined 18.7 percent to 138,100 units from 169,800 units. Apartment construction in the first six months of this year dropped 18 percent to 122,800 units from 149,800 a year ago. Regionally housing starts during the first half of this year were down 30.8 percent in the Midwest, 27.8 percent in the West, 25.5 percent in the South and 15 percent in the Northeast.