July 19, 2017 – Housing starts track the number of new residential construction projects underway over the course of a month. This indicator has implications for demand in construction spending/jobs, consumer wages, and complimentary sectors such as durable household item sales. Along with building permits, housing starts is considered a leading economic indicator.
Housing starts in June came in at an annualized rate of 1.215 million, well above expectations of an annualized rate of 1.170 million and 8.3% above May’s upward revision of 1.122 million. Single-family starts rose 6.3% this month to 849,000. Permits for single-homes rose 4.1%. Multi-family permits had a sharp increase of 13.9% to 443,000 with the Midwest, West, and South having the strongest permit count.
With June housing starts surging up 8.3% above last month’s numbers, this is an indicator that home builders are becoming more confident homes will sell upon completion. Housing starts weren’t the only positive number in June, the completions rate for multi-family units is up 5.2% signaling homes are being built at a faster rate. An increase in housing starts is a helpful indicator to investors of how the economy will react. A boost in homes being built drives up demand for building materials as well as the demand for labor of home builders. June’s rise in housing has broken a three month decline and has rebounded above March’s level.