June Housing Starts: Finding Ways to Get it Done

• June housing starts rose 6.3% from May and 29.1% from a year ago, to 1.643 million (SAAR), according to the U.S. Census Bureau.
• Housing permits fell 5.1% from May, to 1.598 million (SAAR).
• The number of completed homes fell 1.4% month-month, to 1.324M (SAAR).

Despite rising costs and limited availability of key materials and labor, the nation's home builders exceeded expectations and found ways to break ground on the third-most new homes in a single month since 2006 -- a sign of the enduring demand from buyers for homes of all types. But an ongoing pullback in permits -- an indicator of building activity still to come in future months -- is also a clear signal that difficulties persist, and that construction activity could be even higher given a bit more long-term certainty and an easing of critical supply chain volatility. While lumber prices have fallen back to earth after the prolonged surge that began last spring, disruptions are now pushing up prices of other key building materials including steel, concrete and lighting, and making other important supplies very difficult to come by. Reports of multi-month delays in the delivery of windows, heating units, refrigerators and other items have popped up across the country, delaying delivery of homes and forcing builders to cap activity, and many builders continue to point to a shortage of available workers as a separate challenge. June will go down as a very solid month, and also one symbolic of the month-to-month struggle that builders face and a reminder of just how creative they are being and will need to continue to be to get past significant obstacles and deliver for a market starved for new housing supply.