Housing Starts Down Again in June

The market for new home construction continued to stumble in June, as starts fell by 5.0%. This is worse than it sounds. Today's report from the Census Bureau also revises downward May's annualized rate of starts from 593,000 to 578,000, making its drop 14.9%, instead of the 10.0% drop reported last month. Moreover, June's rate of 549,000 was well below the 575,000 analysts expected. Americans continue to demand fewer new homes without the home buyer credit.

Here are starts on a historical basis:

starts 2010-06.PNG

As you can see, June's rate is approaching October's downward spike. It would only need to drop another 13.1% to hit the April 2009 record low. Recently, downward revisions have been the norm for starts, so don't be surprised to June's number drop even further when it's revised in August.

But surprisingly, permits were slightly up in June -- by 2.1%. Obviously that's not much, but it's a lot better than another drop. If the trend holds up, it could indicate that the market for new homes has hit bottom. The number of new permits is a leading indicator. Yet, considering how much inventory is still out there providing opportunities for home buyers to purchase foreclosured properties and short sales, it's a little hard to believe that demand will rebound much for new houses anytime soon. Here's the chart for permits:

permits 2010-06.PNG

Presented by

Daniel Indiviglio was an associate editor at The Atlantic from 2009 through 2011. He is now the Washington, D.C.-based columnist for Reuters Breakingviews. He is also a 2011 Robert Novak Journalism Fellow through the Phillips Foundation. More

Indiviglio has also written for Forbes. Prior to becoming a journalist, he spent several years working as an investment banker and a consultant.

The Blacksmith: A Short Film About Art Forged From Metal

"I'm exploiting the maximum of what you can ask a piece of metal to do."

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus

Video

Riding Unicycles in a Cave

"If you fall down and break your leg, there's no way out."

Video

Carrot: A Pitch-Perfect Satire of Tech

"It's not just a vegetable. It's what a vegetable should be."

Video

An Ingenious 360-Degree Time-Lapse

Watch the world become a cartoonishly small playground

Video

The Benefits of Living Alone on a Mountain

"You really have to love solitary time by yourself."

Video

The Rise of the Cat Tattoo

How a Brooklyn tattoo artist popularized the "cattoo"

More in Business

Just In