For the first time since June 2020, both single-family starts and permits fell below a 1 million annual pace, the National Association of Home Builders reports.
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According to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, overall housing starts fell 2% to a seasonally adjusted annual rate of 1.56 million units in June – the lowest since June 2020. In contrast, the multifamily sector, which includes apartment buildings and condos, increased 10.3% to an annualized 577,000 pace.
“While the multifamily market remains strong on solid rental housing demand, the softening of single-family construction data should send a strong signal to the Federal Reserve that tighter financial conditions are producing a housing downturn. Price growth will slow significantly this year, but a housing deficit relative to demographic need will persist through this ongoing cyclical downturn,” said NAHB Chief Economist Robert Dietz.
Overall permits decreased 0.6% to a 1.69 million unit annualized rate in June. On a regional and year-to-year basis, combined single-family and multifamily starts are 4.4% lower in the Northeast, 4.7% higher in the Midwest, 11.1% higher in the South and 0.4% lower in the West.
Ian Heller is the Founder and Chief Strategist for Distribution Strategy Group. He has more than 30 years of experience executing marketing and e-business strategy in the wholesale distribution industry, starting as a truck unloader at a Grainger branch while in college. He’s since held executive roles at GE Capital, Corporate Express, Newark Electronics and HD Supply. Ian has written and spoken extensively on the impact of digital disruption on distributors, and would love to start that conversation with you, your team or group. Reach out today at iheller@distributionstrategy.com.