by Francis Monfort
Groundbreaking on new homes rebounded last June, resulting in the fastest annualized growth seen in four months, according to recent data from the Department of Housing and Urban Development and the U.S. Census Bureau.
Privately owned housing starts were at a seasonally adjusted annual rate of more than 1.2 million, an 8.3% increase from the 1.12 million revised estimate for May and a 2.1% year-over-year increase from the 1.19 million rate in June 2016.
Single-family housing starts grew 6.3% to an 849,000 rate during the month, compared with the revised 799,000 figure for May.
Despite the improvement in residential construction and steady demand, the sentiment among builders has become less upbeat and reached an eight-month low, Bloomberg reported. An increase in costs for construction materials like lumber have wiped out a surge in enthusiasm following the elections when builders looked forward to deregulation and tax reform.
Additionally, homebuilders said construction is seeing challenges from a shortage of land and skilled labor, offsetting benefits from potential buyers encouraged by affordable borrowing costs and solid labor-market gains.
“Demand for new housing continues to outpace supply,” NatWest Markets economists wrote ahead of the report, quoted by Bloomberg. “Builders remain confident about the industry’s ability to continue expanding gradually, with the greatest challenge being the lack of both buildable lots and skilled labor.”
Building permits and housing completions also saw month-over-month increases in June. Privately owned housing units authorized by building permits were at a seasonally adjusted annual rate of 1,254,000, a 7.4% growth compared to the revised prior-month figure of 1,168,000 and a 5.1% increase from the year-ago rate of 1,193,000.
Privately owned housing completions were at a seasonally adjusted annual rate of more than 1.2 million. This is a 5.2% increase from the revised May estimate of about 1.14 million and is 8.1% higher than the June 2016 rate of about 1.11 million.
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