Housing starts slump, permits perk up
Housing starts dropped 5% to a seasonally adjusted annual rate of 549,000 from 578,000 in May. That's also down 5.8% from 583,000 in the year-ago month, and it leaves starts at their lowest level since October. Single family starts slipped 0.7% from May and 4.6% from the year-ago level, leaving them at a 13-month low. On a regional basis, starts fell across the board -- with declines of 2.4% in the South, 5.9% in the West, 6.9% in the Midwest, and 11.3% in the Northeast.
Meanwhile, building permits popped 2.1% to a seasonally adjusted annual rate of 586,000 in June from a revised 574,000 in May. That's down 2.3% from the 600,000 permits issued a year ago. Single family permits fell 3.4% to 421,000 from 436,000. Regionally, we saw a 32.3% monthly gain in the Northeast and a 9.7% rise in the West. But permit issuance fell 7.8% in the South and 10.8% in the Midwest.
The housing industry remains stuck in a rut, with both sales and construction activity moribund. Single family permits and starts slumped in June, and relatively broad-based regional weakness was evident up in the overall figures. Builders simply lack the confidence -- or in some cases, the financing -- to ramp up construction, especially in the wake of the home buyer tax credit's expiration.
What about the longer term outlook? Well, cheap mortgage rates and cheap homes should help ease the housing market's pain. But until we see signs of life in the labor market, we're just not going to see a robust recovery -- only more malaise.