New Home Permits Indicate Further Housing Market Softness

Due to a large revision in the May housing starts, reducing new starts by 40k, June showed a monthly increase in housing starts. June housing starts actually came in 17k higher than anticipated. Housing starts rose 2.3% in June after falling -3.4% in May. All the strength in the housing starts in June was focused on multi-family which rose +12.5% MoM. Single family starts actually fell -.2% MoM.

May building permits on the other hand were revised higher by 19k. June's new housing permits were much weaker than expected, coming in 74k below consensus, and 114k lower versus the prior month, showing a decline of -7.5% MoM. All the weakness in permits were focused on the multi-family sector which declined -15.3% MoM. Over the last quarter, permits have fallen -23%, which indicates that the new home construction will remain weak. Permits tend to be less volatile than starts.

Houses under construction held steady in June, while housing completed fell -6% MoM.