Housing Starts Pull Back in June

Economics Group of Wells Fargo Bank, N.A. Summary Residential Construction Falls Back in June Total housing starts declined sharply during June, partially reversing May’s robust gain. The drop was broad-based, with both single-family and multifamily production pulling back during the month. A steep fall in multifamily permits dragged down overall permits during June. Single-family permits rose slightly, extending the streak of monthly gains to five months. All told, a divergence between single-family and multifamily construction is increasingly apparent. Single-family activity is gradually improving against a backdrop of solid underlying demand, low resale inventory, softer material price inflation and the ability to utilize incentives to bridge the affordability gap for buyers. By contrast, multifamily development looks to be shifting into a lower gear. Although apartment demand has picked up so far this year, the rebound has not been strong enough to match the near-record amount of new construction already underway. Higher apartment vacancy rates and tighter credit conditions for developers are likely to weigh on multifamily construction moving forward. READ FULL ARTICLE >>