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Spring Binge Building Gave US Home Construction A Hangover
The boom in US home construction abated a bit in June, data released on Wednesday suggested.
A month on from what, as initially reported, was the biggest increase in housing starts since 2016, the pace of new construction receded, Commerce Department figures showed.
The 1.43 million annual rate observed last month was short of consensus, even as it was above pre-pandemic levels. These updates are watched closely at a pivotal time for the US housing market.
June's 8% drop was the largest in
The housing market is still in flux. The product mix has changed from existing to new, from sf to mf. Interestingly in Manhattan rental rates are way up but prices are flat to down. The coop apartment market is trying to find a bottom. Rental rates often lead purchase prices. As I have previously mentioned, the market may end up adjusting in a frustrating way for buyers- prices will not move much in most places, and buyers may get some rate relief as well. THe exception may be in the moonshot markets- those will correct (Boise, Austin, Raleigh etc) plus in markets like SF with big WFH and employment downside shocks. But for most of the rest boring is likely to prevail. So the inflation adjusted price of shelter will revert to the mean over the next 5 years just by being flattish and lagging inflation.