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Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update highlights housing starts.
- Housing starts were slightly stronger than expected in June rising 14.6% from May. Given the large backlog of foreclosed homes, any expansion of single family construction by builders is likely to be localized but reflects budding strength none-the-less.
- The bulk of the increase came from the multi-family portion of the index, which jumped 30.4% from a month earlier. The rental market has been strong in the wake of the housing crisis and recession leading to an expansion of building. However, single family construction also rose, increasing a respectble 9.4%. Construction has ramped up slowly, but steadily in recent months and was 16.7% stronger in June than a year earlier.
- Single family construction remains muted, which will help those local markets still wrestling with an over-supply of housing. However, slow construction hurts the economy as construction is a labor intensive industry, one which shed many jobs during the recession. Localized strength is propelling some growth, but building will remain limited for some time to come.
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