Housing starts around the country were sluggish in June, with single-family starts registering below year-ago numbers for a fifth consecutive month. In all, housing starts were down 0.9 percent from the previous June, and were on pace for a total of 1.25 million for the year.
Single-family starts have taken a hit in most of the country, and the Midwest is no exception. A drop of 8.3 percent was registered in June from a year earlier, for single-family starts throughout the region.
High land and labor costs have tempered optimism that might otherwise accompany low mortgage rates and an economy that’s been strong overall. This may be a reason that the issuance of new building permits has slowed, dropping by 6.1 percent from June of last year and signaling that the difficulties in the new construction market may continue in the months ahead.
But there are also some encouraging signs on the horizon. One of those is that construction jobs were a bright spot in the overall job market in May, suggesting that builders may be preparing for the clearing of the current logjam in the homebuilding climate later in the summer and beyond.
Single-family construction has stubbornly lagged behind other housing sectors. Across the country, there were 519,000 single-family homes under construction as of the year’s mid-point, which represents almost no change from a year earlier. Starts on apartment buildings of at least five units were up from the previous June by 25 percent, despite dropping slightly from May’s figure. With 616,000 units under construction, the strong preference of many for renting over buying (or the inability to become first-time buyers) continues unabated.