Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

U.S. Housing Starts, Building Permits Edge Lower in June

Economic Indicators Jul 19, 2022 08:42AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

By Geoffrey Smith 

Investing.com -- The U.S. housing market stayed reasonably solid in June, according to data published Tuesday, with housing starts and building permits falling only a little from May's levels.

However, analysts warned that the numbers were flattered by a bounce in the more volatile multi-family segment of homes, and warned that a sharp slowdown is still highly likely in the second half of the year, as higher prices and borrowing costs damp demand. 

Both data points had plunged in May to their lowest in six months or more, as higher construction costs and mortgage rates hurt affordability. June's data appeared more benign at first glance: the number of housing starts nationwide fell only 2.0% on the month to 1.559 million from an 1.591 million in May - a figure that was revised higher by over 40,000 from the initial estimate.

Building permits, meanwhile, fell by 0.6% to 1.685 million, a more gentle decline than forecast.

However, underneath the headline numbers, analysts said that the trend is clearly weakening.

"Core single-family starts and permits both fell by 8%, the fourth straight declines," said Ian Shepherdson, chief economist with Pantheon Macroeconomics. "Homebuilders are responding to plunging demand, but the adjustment has some way yet to run."

He noted that construction activity lags sales, which in turn lag mortgage applications. These have fallen by more than a quarter since the start of 2022.

"Even if the June flattening is sustained - it probably won’t be - the data suggest that single-family housing construction needs to fall by a further 20% or so over the next few months," Shepherdson said in a note to clients.

The data come a day after the National Association of Home Builders' index of housing market activity posted its largest monthly drop ever. The NAHB index is a forward-looking indicator, which aims to show where the hard data on permits and starts are heading over the next six months.

While both series are now more than 10% off their Covid-era highs, housing starts are still at their highest level since the subprime bubble started to deflate in 2007, while building permits are higher than at any time in the decade before the pandemic.

U.S. Housing Starts, Building Permits Edge Lower in June
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Thapelo Masogana
Thapelo Masogana Jul 20, 2022 7:05AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
So does it mean the inflation is still getting worse?
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email