Home-building across US declines again; lowest in 9 months

Mortgage rates and prices keep climbing, not to mention those tariffs

TRD NATIONAL /
Jul.July 18, 2018 01:00 PM

(Credit: Hurlburt Field)

New home construction has fallen and it can’t get up.

Residential home starts nationwide fell 12.3 percent in June, to an annualized rate of 1.17 million, the government reported, according to Bloomberg.

The latest figures marked the biggest drop in home construction since November 2016. And couple that with a 2.2 percent drop in permits — a gauge of future activity — it made for the weakest activity since in nine months. That low-point coincided with hurricanes Harvey and Irma, which devastated the southern U.S. last fall.

In real numbers, the June drop in home starts is around 164,000.

That compares to May, which saw the highest level of starts at 1.35 million since July 2007. The fall reflects a 19.8 percent drop in multifamily home starts and a 9.1 percent drop in single-family home starts.

Multifamily new construction is generally up and down, however, so gauging month to month is difficult. Multifamily starts rose in March 14.4 percent from a 10.2 percent drop in February.

The reasons for the low residential construction numbers are many. On the buyer side, mortgage interest rates and prices continue to climb and outpace wage gains.

On the supplier side, President Trump’s tariffs have pushed prices of steel higher. The price of lumber is also high amid trade conflicts with Canada.

Developers are also having trouble finding qualified labor, and enough land to build, according to Bloomberg. [Bloomberg] — Dennis Lynch 


Related Article

arrow_forward_ios
Miami will see a big dip in home prices during the next recession, according to reports (Credit: iStock)

Miami among most at-risk cities for falling home prices during next recession: report

The Watchtower building at 25 Columbia Heights, CIM Group’s Shaul Kuba (right) and LIVWRK’s Asher Abehsera (Credit: Wikipedia, CIM Group, and LinkedIn)

JPMorgan leads $335M refi for CIM and LIVWRK’s Watchtower renovation

Low mortgage rates boost homebuilding stocks despite recession anxiety

The construction giants catching a Windy City windfall

David Marx of MDG Real Estate and the site at 71-05 Parsons Boulevard in Queens (Credit: Google Images and iStock)

Here’s a weird one: David Marx plans towers at Queens site he bought from his own company

Resi scorecard: Brooklyn and Queens condo inventory through June 2019

Here’s what a Fed rate cut would mean to the US housing market

The Daily Dirt: The dark cloud hanging over buyers

arrow_forward_ios