US Construction Starts Increase 17% in June as Demand for City Living Drops
As lockdowns and stay-at-home orders are eased across much of the US, home builders have seen an uptake in construction starts by 17% in June. According to data released by the US Census Bureau, residential housing starts climbed to an annualized rate of 1.19 million – the largest month-over-month increase since 2016. However, the level still remains 4% lower compared to the same time a year prior.
In the meantime, applications to build new homes rose by 2.1% to a total of 1.24 million, while single family starts increased by 17% since May. The sudden uptake in new housing construction can be attributed to the historic drop in mortgage rates, which fell below 3% this week, as well as the migration of city dwellers to suburban and rural areas to hide out from soaring infection rates.
However, despite the positive increase in housing starts and building applications, the US economy still remains significantly volatile. As coronavirus cases continue to soar across the US, prompting some states to reinstate mitigation measures, coupled with a continuation of weekly initial jobless claims in the millions, the direction of the health crisis and ultimately the economy becomes even more uncertain.
Information for this briefing was found via Bloomberg and the US Census Bureau. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
