Tuesday, July 19, 2011

New Residential Construction Report: June 2011

Today’s New Residential Construction Report showed increases to both single family permits and starts from last month but a notable decline to permits from last year while starts showed the first (albeit slight) annual increase in thirteen months.

Single family housing permits, the most leading of indicators, increased a slight 0.2% on a month-to-month basis to 407K single family units (SAAR), dropping a notable 3.78% below the level seen in June 2010 and an astonishing 77.36% below the peak in September 2005.

Single family housing starts increased 9.4% to 453K units (SAAR), rising a slight 0.44% above the level seen in June 2010 and a stunning 75.15% below the peak set in early 2006.

With the substantial headwinds of elevated unemployment, epic levels of foreclosure and delinquency, mounting bankruptcies, contracting consumer credit, and falling real wages, an overhang of inventory and still falling home prices, the environment for “organic” home sales remains weak and likely very fragile.