Steel Markets

Single-Family Starts Outpace Multi-Family in June

July 18, 2019

Housing starts declined slightly in June as single-family starts failed to offset a decline in multi-family construction. Starts in June dropped just under 1 percent from the revised May rate to a seasonally adjusted annual rate of 1,253,000. Single-family housing starts rose 3.5 percent from May to a SAAR of 847,000, while construction of apartment style homes of five units or more fell 9.4 percent. Compared to the June 2018 rate, housing starts grew 6.2 percent, according to the latest data from the U.S. Census Bureau and Department of Housing.

Starts were strongest in the Northeast and Midwest, jumping 31.3 percent and 27.1 percent from May, respectively. Starts fell in the South by 9.2 percent and in the West by 4.9 percent.

“As of June 2019, there were 519,000 single-family homes under construction,” commented Robert Dietz, Chief Economist at the National Association of Home Builders. “This is roughly flat from a year ago. However, there are currently 616,000 apartments under construction, the highest count since April 2017.”

Permit authorizations were at a SAAR of 1,220,000, down 6.1 percent from May and 6.6. percent below the June 2018 rate. Single-family authorizations rose 0.4 percent from May while permits for buildings of five units or more plummeted 20.7 percent.

Regionally, only the Northeast showed an improvement in authorizations, up 21.9 percent from May. Permit authorizations fell by 0.6 percent in the Midwest, 10.4 percent in the South and 7.9 percent in the West.

“The cumulative impact of recent declines in current construction activity … is responsible for a slight decline in housing’s share of GDP,” added Dietz.

NAHB expects additional single-family growth in areas beyond the exurbs (defined as areas outside of major metropolitan areas and beyond the suburbs) as a response to housing demand and continued healthy labor markets.