Housing starts figures for June were just released. Here’s what they looked like …
Housing starts dropped 5% to a seasonally adjusted annual rate of 549,000 from 578,000 in May. That’s also down 5.8% from 583,000 in the year-ago month, and it leaves starts at their lowest level since October. Single family starts slipped 0.7% from May and 4.6% from the year-ago level, leaving them at a 13-month low. On a regional basis, starts fell across the board — with declines of 2.4% in the South, 5.9% in the West, 6.9% in the Midwest, and 11.3% in the Northeast.
Meanwhile, building permits popped 2.1% to a seasonally adjusted annual rate of 586,000 in June from a revised 574,000 in May. That’s down 2.3% from the 600,000 permits issued a year ago. Single family permits fell 3.4% to 421,000 from 436,000. Regionally, we saw a 32.3% monthly gain in the Northeast and a 9.7% rise in the West. But permit issuance fell 7.8% in the South and 10.8% in the Midwest.
The housing industry remains stuck in a rut, with both sales and construction activity moribund. Single family permits and starts slumped in June, and relatively broad-based regional weakness was evident up in the overall figures. Builders simply lack the confidence — or in some cases, the financing — to ramp up construction, especially in the wake of the home buyer tax credit’s expiration.
What about the longer term outlook? Well, cheap mortgage rates and cheap homes should help ease the housing market’s pain. But until we see signs of life in the labor market, we’re just not going to see a robust recovery — only more malaise.
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It seems that I have to agree with your thinking. (You can always tell an intelligent person because their views are the same as yours.) Seriously, I can only see a downside to the economy and especially to the housing market in view of the global situation and our own employment situation. The extension of the unemployment is starting to almost look like wellfare but maybe that is as it should be. All we can do is try to stay optimistic but also realistic. Thanks for all your input.
What the new home building industry need is a new product that makes foreclosure home obsolete.
New homes need to offer lower living costs and new benefits and feature not found in existing homes. This includes lower energy costs, facilities to accommodate the injured or aged.
The biggest problem with foreclosures and short sales is the uncertainty of the final close date.
The technology exists today to reduce the new home building time from months to weeks. This could provide a competitive edge to new homes.
There is plenty fo demand especially for Generation Y first time buyers who want to reduce their monthly housing costs and start a family. Retired Baby bloomers are also looking for a cost effective housing solution that reduces their costs and decreases their maintenance.
The New Home Building market need to reinvent itself and make all older homes obsolete just like the computer industry does.