U.S. housing starts increased in June by more than forecast, suggesting residential construction is stabilizing despite lingering supply-chain constraints and labor shortages.
Initial home construction rose 6.3 per cent last month to a 1.64 million annualized rate, a three-month high, according to government data released Tuesday. The median estimate in a Bloomberg survey called for a 1.59 million pace.
Applications to build, a proxy for future construction, fell to an annualized 1.6 million units in June.
Exorbitant materials costs, combined with shortages of land and labor, have thwarted developers seeking to ramp up construction. Supply concerns and a slowdown in sales pushed builder confidence down to an 11-month low in July, a survey from the National Association of Home Builders showed Monday.
An inventory crunch that followed solid demand last year has sent prices soaring, tempering buyer interest. A record 71 per cent of consumers said higher prices were a reason why buying conditions have deteriorated, according to July data from the University of Michigan.
The government’s report showed the number of single-family homes started increased 6.3 per cent in June to a 1.16 million pace, the fastest since March. Beginning multifamily home construction climbed 6.2 per cent to the highest since July 2020.
The number of one-family homes authorized for construction but not yet started -- a measure of backlogs -- rose to 144,000 in June, the highest since October 2006 and suggesting a robust pipeline for builders.