According to The National Association of Home Builders (NAHB), single-family home builders continued to slow the pace of new construction in June in response to worsening conditions in the nation's housing and financial markets. This is in response to the latest data released by the U.S. Commerce Department today.
Starts of new single-family
homes declined 5.3% to a seasonally adjusted annual rate of 647,000 units in
June. This was the slowest pace in 17 years, and marked a decline of 64.5% from
the peak of the building boom in January of 2006. Meanwhile, issuance of
building permits for single-family homes declined 3.5% to a rate of 613,000 units.
"Builders continue to do
their part to reduce inventories of unsold homes on the market by reining in
new construction," noted Sandy Dunn, president of the National Association
of Home Builders (NAHB) and a home builder from Point Pleasant, WV. "Now
more than ever, it's up to Congress, which must finish its work on a badly
needed housing stimulus package that will help stabilize the housing market and
stem the negative effects of the housing downswing on our economy."
"The single-family data
from today's report is exactly in keeping with what our builder members have
been telling us in recent surveys," added NAHB Chief Economist David
Seiders. "Traffic of prospective buyers is down substantially, and
consumer confidence is very low. Job-market losses, deepening problems in the
finance arena and sinking home values aggravated by the wave of foreclosures
are all contributing factors that are keeping potential home buyers on the
sidelines. Clearly there is a need for immediate action by Congress and the
Administration to help put an end to this downward economic spiral and restore
the homeownership dreams of many Americans."
Overall housing starts and
building permits posted misleading gains of 9.1% and 11.6%, to 1.07 million
units and 1.09 million units, respectively, for the month, largely due to a
one-time bump in multifamily activity that was related to newly instituted
building code changes in New York City. Excluding the Northeast multifamily
data, there was a 4% decrease in overall housing starts and a 0.7% gain in
building permits for the month.
Multifamily housing starts,
fueled by a big jump in the Northeast, posted a 42.5% gain to a rate of 419,000
units in June. Multifamily permits, also skewed by the Northeast/New York City
data, posted a 39.4% gain to 478,000 units.
The latest regional data
showed that Northeast housing starts more than doubled in June (as a result of
the New York City data), while Midwest starts posted a 10.5% decline, starts in
the South posted a 0.4% gain and starts in the West registered an 8.2% decline
in June. Building permits (again affected by the New York City data) showed a
73% gain in the Northeast for June, along with more typical numbers such as a
2% decline in the Midwest, a 3% gain in the South and a 0.9% gain in the West.