Single-Family Starts Remain Fairly Stable as Multifamily Starts Drop Month-to-Month

Housing starts in the single-family market remained relatively stable in June, but on a month-to-month basis multifamily starts fell notably in a move a builders said reflects some caution on their part in terms of ensuring supply does not outpace demand.

Single-family housing starts in June came in at a seasonally adjusted rate of 591,000, about 0.8% below the revised May figure of 596,000, according to government figures for the private sector market. The June rate for units in buildings with five units or more was 236,000.

Combined, the overall seasonally adjusted start rate in June was 836,000, down about 9.9% from the May estimate of 928,000, but 10.4% above the June 2012 rate of 757,000, according to data released Wednesday by the Department of Housing and Urban Development and the Census Bureau.

“Construction of multifamily buildings slowed following recent months of strong activity in that sector,” the National Association of Home Builders noted in a press release commenting on the figures.

"While demand for new homes and apartments has grown considerably over the past year, builders are still being very careful not to get ahead of the market, and today's report reflects that cautious approach," said Rick Judson, NAHB’s chair and a home builder from Charlotte, N.C.

Single-family building permits in June were at a rate of 624,000, 0.6% above the revised May figure of 620,000. Building permit authorizations of units in buildings with five units or more were at a rate of 261,000 in June.

Overall, seasonally adjusted building permits dropped about 7.5% to 911,000 in June from a revised May rate of approximately 985,000, but compared to June of last year, when there were about 785,000 permits during the month, total permits are up 16.1%.

The 7.5% month-to-month decline in this category “was due entirely to a pullback in the multifamily sector, where permits fell 21.4%,” according to the NAHB.

Single-family housing completions in June came in at a rate of 554,000, 1.1% below the revised May rate of 560,000. The June rate for units in buildings with five units or more was 188,000.

Overall housing completions came in June at a seasonally adjusted annual rate of 755,000, about 6.3% above the revised May estimate of 710,000 and 20.2% above the June 2012 rate of 628,000.