Analysis of Building Permits, Housing Starts, and Housing Completions
Building permits are a crucial indicator of the health of the housing market. The latest data from the Census shows that building permits for privately-owned housing units have been on the rise, with a seasonally adjusted annual rate of 1,446,000 in June. However, single-family permits have been falling due to rising mortgage rates, which have put pressure on smaller homebuilders.
The decline in housing permits has also impacted housing starts, which were at a seasonally adjusted annual rate of 1,353,000 in June. Single-family housing starts have also seen a decrease, further highlighting the challenges faced by the housing market.
On a more positive note, housing completions have been on the rise, with a seasonally adjusted annual rate of 1,710,000 in June. This is a promising sign, as it indicates that builders are making progress in completing their backlog of homes.
The key takeaway from the latest data is the need for lower mortgage rates to boost permit data for both single-family and five-unit construction. Lower rates would help stimulate demand and support the construction of new homes, which is essential for addressing the current housing shortage.
As we look ahead, it is crucial for policymakers to prioritize measures that support the housing market, such as lowering mortgage rates and streamlining the permitting process. By doing so, we can ensure a steady supply of new homes and support the overall health of the housing market.
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