Written by Louis Wilson on 2019/07/17

Home building slows to a halt

June 2019 data below expectations.

Today, the United States Census Bureau and Department of Housing and Urban Development announced that the number of building permits, housing starts, and housing completions were all below the revised May estimates.

Building permits were down 6.1% while housing starts and completions were down 0.9% and 4.8% respectively.

June 2019May 2019% Change
Building Permits1,220,0001,299,000-6.1%
Housing Starts1,253,0001,265,000-0.9%
Housing Completions1,161,0001,220,000-4.8%

This isn't the first month in 2019 to show weakened results. January and February were particularly weak months. The Wall Street Journal blamed the slowdown on "rising costs for builders, including growing wages for construction workers, pose challenges for some home builders attempting to construct lower-priced properties to meet demand." They also explained that, "[o]ther challenges include lack of available land and high zoning and regulatory standards in some parts of the country."

The slowdown in housing supply often leads to rising prices and, eventually, the pricing out of certain home buyers. Over time, the metrics should correct themselves, as rising prices makes building more economic again. However, the differences in supply and demand can linger for months, as it takes time to get permits, build homes, and sell them.

The metrics explained.

These metrics are released and revised monthly by the government. They are watched by economists, investors, and builders alike. They not only have an effect on home prices but can indicate the overall health of the US economy. The data is seasonally adjusted, as home building varies with the weather and extreme events like wildfires and hurricanes.


U.S. Census Bureau and U.S. Department of Housing and Urban Development, New Residential Construction, July 17, 2019

The Wall Street Journal, Home Building, New-Home Permits Have Softened This Year, March 26, 2019