Completions continue to rise much faster than housing starts. It’s a function of a high interest rates, affordability, and a slowing economy.
Please consider the New Residential Construction Report for June 2024.
Building Permits
- Privately-owned housing units authorized by building permits in June were at a seasonally adjusted annual rate of 1,446,000. This is 3.4 percent above the revised May rate of 1,399,000, but is 3.1 percent below the June 2023 rate of 1,493,000.
- Single-family authorizations in June were at a rate of 934,000; this is 2.3 percent below the revised May figure of 956,000.
- Authorizations of units in buildings with five units or more were at a rate of 460,000 in June.
Housing Starts
- Privately-owned housing starts in June were at a seasonally adjusted annual rate of 1,353,000. This is 3.0 percent (±10.5 percent) above the revised May estimate of 1,314,000, but is 4.4 percent (±12.7 percent) below the June 2023 rate of 1,415,000.
- Single-family housing starts in June were at a rate of 980,000; this is 2.2 percent (±12.1 percent) below the revised May figure of 1,002,000.
- The June rate for units in buildings with five units or more was 360,000.
Housing Completions
- Privately-owned housing completions in June were at a seasonally adjusted annual rate of 1,710,000. This is 10.1 percent (±10.6 percent) above the revised May estimate of 1,553,000 and is 15.5 percent (±12.6 percent) above the June 2023 rate of 1,480,000.
- Single-family housing completions in June were at a rate of 1,037,000; this is 1.8 percent (±10.3 percent) above the revised May rate of 1,019,000.
- The June rate for units in buildings with five units or more was 656,000.
Housing Starts Single Family vs Multi-Family
Housing starts have plunged from the peak, mut more so multi-family than single family.
From their peaks, starts are down 26.0 percent, single-family down 19.8 percent, and multi-family down 40.5 percent.
Single-family starts have stabilized for about a year at roughly 1,000 units at a seasonally-adjusted annualized rate.
Housing Units Under Construction
The number of units under construction has now peaked. This corresponds to a slowing economy and recession but with a long lead time.
The peak in 1986 did not lead to recession and there was no surge to begin with in 2000.
The surge in completions will continue for a long time due to the record number (now near-record) number of units under construction.
I still do not have answer to questions I have been asking for months.
Where Do We Put 8 Million Illegal Immigrants?
On May 23, I asked Where Do We Put 8 Million Illegal Immigrants?
Millions of immigrants keep pouring in. New residential construction has stalled and multi-family construction is in decline. Completions are rising, but is that enough housing?
One of Every Five New York City Hotels is Now a Migrant Shelter
On June 2, I noted One of Every Five New York City Hotels is Now a Migrant Shelter
New York City hotel prices have never been higher. Illegal immigration is part of the reason why. Mayoral graft is another.
Don’t worry, LA has the affordable housing solution starting with “affordable housing units at $600,000 each to house 278 homeless out of 75,518 in the county.
Please note A New High-Rise Building Will House the LA Homeless in $600,000 Units
If the county were to shelter the 75,518 homeless, the cost would be $45,310,800,000. That’s $45.3 billion, excluding free property taxes, case workers, maintenance, utilities, insurance, food, police, clothes, doormen, or medical care.
And it would not stop there. Every homeless person in the state would move their tent to LA to participate.
This dear woke fans is what’s known as “affordable housing”.
Clearly, the proper solution is to do the same thing for 8 million illegal migrants. After all, free food, free clothes, and free shelter is a right.
Key Question
Returning to reality, the key issue is whether completions will finally easy rent increases.
I think that started last month. But it will be spotty by location. Prices in places like Austin that have seen a massive surge in construction will be more impacted than cities with limited construction.
Rent is sticky. But a slowing of rent prices will help the CPI.
For a discussion of rent please see CPI Declines in June, Rent Finally Moderates, Food Away From Home Is a Problem
The string of 33 consecutive months of rent rising 0.4 percent or more is finally broken.