July 20, 2021 | 09:25
Hot Starts in the Summertime
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U.S. housing starts blew past expectations, jumping 6.3% to 1.643 mln a.r. in June. That marks the second straight monthly climb and not all too far from March’s 15-year high of 1.725 mln. Overall, residential construction is holding up, despite supply chain constraints and a lack of skilled workers.
Single-family home construction, the largest segment of the housing market, rose 6.3%, while the volatile multi-unit category climbed 6.2%. On a regional basis, homebuilding rose in the densely populated South and West but fell in the Northeast and Midwest.
Meanwhile, building permits dropped for the third month in a row, down 5.1% to 1.598 mln annualized. And, for the first time since February 2020, permits are now below starts amid materials shortages, difficulty securing lots and labour constraints.
Bottom Line: Although key headwinds remain, the homebuilding sector remains sturdy, even as momentum moderates. Housing demand is still elevated and construction activity is supported by a shortage of previously owned homes available in the resale market.