Steel Markets
Housing Starts Up in June Despite Supply-Side Constraints
Written by David Schollaert
July 19, 2021
Housing starts accelerated in June, jumping 6.3% from May to a seasonally adjusted annual rate of 1.64 million units, according to the latest data from the U.S. Census Bureau and the Department of Housing and Urban Development. Single-family starts increased 6.3% to a 1.16 million seasonally adjusted annual rate, while construction on homes of five units or more increased 6.2% to a 483,000 pace.
Despite the increase in housing production, there is concern over weakening permit numbers for both the single-family and multifamily markets. Overall permits decreased 5.1% in June compared with the month prior to a 1.60-million-unit annualized rate. Single-family permits decreased 6.3% to a 1.06-million-unit rate, whereas multifamily permits decreased 2.6% to a 535,000 pace.
“The recent weakening of single-family and multifamily permits is due to higher material costs, which have pushed new home prices higher since the end of last year,” National Association of Home Builders Chief Economist Robert Dietz said. “This is a troubling sign for future housing production. This is a challenge for a housing market that needs additional inventory.”
The count of single-family homes currently under construction is 675,000, up 32% compared to a year ago. The number of multifamily units under construction is up 2% to 684,000 apartments.
“While lumber prices have just recently begun to trend downward, builders continue to deal with rising prices of other building materials, such as oriented strand board, and major delays in the delivery of these goods,” NAHB Chairman Chuck Fowke said. “We are thankful that the White House recently held a meeting to seek solutions to these supply chain issues that are harming housing affordability.”
On a regional and year-to-date basis, combined single-family and multifamily starts are 41.4% higher in the Northeast, 25.5% higher in the Midwest, 21.5% higher in the South and 28.0% higher in the West.
Looking at regional permit data on a year-to-date basis, permits are 33.2% higher in the Northeast, 31.9% higher in the Midwest, 29.6% higher in the South and 32.2% higher in the West.
David Schollaert
Read more from David SchollaertLatest in Steel Markets
GrafTech’s Q2 loss widens in ‘challenging’ business environment
GrafTech cited a “challenging” part of the business cycle as its net loss widened in the second quarter.
CRU: Poor steel margins continue to push down raw material prices
Both iron ore and coking coal prices fell this week because of resistance from buyers. Iron ore prices have continued to fall throughout the past week, following sharp declines in steel prices in China, given no new policy announcement from the ‘Third Plenum’ meeting.
Op-Ed: The myth of the Mexican steel surge
We have heard ominous warnings about a flood of Mexican steel threatening the US market. It's the kind of rhetoric that gets thrown around often with little regard for the facts. The reality is that the Mexican steel surge is simply not happening, and the US steel industry has consistently maintained a significant trade surplus in finished products with Mexico. In 2023 alone, this surplus exceeded $3 billion.
CRU: Demand weakness continues to weigh on global sheet markets
Demand has remained persistently weak across the globe for sheet steel, weighing on prices. US HR coil prices fell the furthest this week as high-volume, low-priced deals were transacted as mills looked to fill order books and competed with one another amid relative demand weakness. Meanwhile, European prices were also down due to low demand […]
Influx of coated products fuels recent import surge
Steel imports fell back in May from April’s recent high but remained elevated compared to the levels seen over the past year. A deeper dive into the data confirms what SMU has been hearing from sources: Coated sheet is driving the recent rise in overall import levels.