U.S. Housing Starts Fall 8% in June, Biggest Drop in a Year

The numbers: Construction on new homes fell 8% in June, as U.S. homebuilders sharply slowed down starting on new single-family homes and focusing on finishing existing projects.

Housing starts fell to a 1.43 million annual pace last month from 1.56 million in May, the government said Wednesday. The data measures how many houses would be built over an entire year if construction took place at the same rate in every month as it did in June.

The pace of construction in June slowed from a jump of nearly 16% the previous month. The jump in housing starts in May this year was only eclipsed by a surge in construction in March 2021.

Economists on Wall Street were expecting a sharper drop of 9.2%. All numbers are seasonally adjusted. The last time housing starts fell by this much was in July 2022.

Both single and multi-family construction fell in June, as home builders pulled back on new construction to focus on finishing and selling existing inventory.

But keen interest from would-be home buyers is creating strong demand for new homes. These buyers continue to face a lack of options in the resale market for existing homes.

The drop in construction this summer was led by the Midwest, which saw housing starts drop by 33%.

Building permits, a sign of future construction, fell 3.7% to a 1.44 million rate.

Key details: The construction pace of single-family homes fell by 7% in June, and apartment building fell by 11.6%.

Home builders pulled back the most in the Midwest, where housing starts fell by 33%. That comes after a surge in building in May of 67%.

The only part of the U.S. where housing starts rose in June was in the West, where housing starts rose by 4.6% for single-family homes.

Permits for single-family homes rose by 2.2% in June, while permits for buildings with at least five units or more dropped by 13.5%.

Big picture: At the end of spring, builders revved up construction on single-family homes as the weather warmed up. Housing starts jumped nearly 16% in June, according to the government’s data.

But this summer, they’re not pulling back due to weak demand. They appear to be focusing on finishing those projects. 1.68 million homes were under construction as of June, which is the highest level since February.

Demand for new homes continues to be strong, and builders continue to pull back on sales incentives such as price cuts, the National Association of Home Builders reported on Tuesday.

What are they saying? Single-family housing starts have been strong in May and June, Stephen Stanley, chief U.S. economist at Santander U.S. Capital Markets, wrote in a note.

Given that single-family home-building is still elevated this spring and summer, “this adds to the evidence that housing activity is, at a minimum, bottoming out after a rough second half of 2022,” he added.

“Overall, the cooling in building and permit issuance is a good sign for the Fed that is looking to limit housing market activity in an effort to contain inflation,” Katherine Judge at CIBC Economics, wrote in a note.

Keep reading.

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If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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8 Things Sneakily Making Your Home Feel Hot in the Summer

With summer temperatures really ramping up, it can feel like you’re getting hit with a double-whammy.

Not only does it feel like you can’t get cool, but it can also feel like you’re emptying your wallet while trying to do so. So what gives? Why are you spending a fortune on your electric bill and still not feeling comfortable and chilled in your own home?

There might be some hidden culprits at play here that are keeping your house from cooling off, say pros. Life’s too short to not enjoy your home in the summertime, or any season throughout the year — so read on for HVAC professionals’ takes on the most common causes of a hot house (and how you can fix it).

Poor Insulation

Bundling up your home isn’t just important in winter. “The number of windows and doors, the thickness of your exterior walls, and the measure of your insulation’s ability to resist heat in your walls all drive how hard your AC will need to work,” says Kirk Newton, service manager at Reliable Heating & Air.

Your home will struggle to maintain a cool temperature as the cold air your AC produces escapes through leaky walls, windows, doors, and even the roof, adds Josh Mitchell, an HVAC technician and founder of Air Conditioner Lab.

“​​This situation increases your energy costs and can potentially shorten the lifespan of your AC unit,” Mitchell says. There is hope, however. Mitchell suggests considering upgrading your home’s insulation, focusing on the attic, external walls, doors, and windows. “Weatherstripping and sealing windows and doors can also prevent cool air from escaping,” he says. 

Dirty or Clogged Air Filters

This is one of those things that many first-time homeowners don’t think about — out of sight, out of mind. But having clogged air filters definitely affects how efficient your AC will work in your home. “Over time, your AC’s filters can become clogged with dust and debris, causing your unit to work harder, reducing efficiency and potentially wearing out system components prematurely,” Mitchell says. “This can be addressed by cleaning or replacing your filters regularly, typically every one to three months, depending on usage and the local environment.”

Inadequate AC Unit Size

In this case, size really does matter. If your AC unit isn’t properly sized for the size of your home, then it won’t be able to cool it efficiently, says Mitchell. “If it’s too small, it may run continuously, and if it’s too large, it might cool too quickly without effectively dehumidifying,” he says. “To rectify this, consult with an HVAC professional who can perform a load calculation to determine the appropriate size unit for your home.”

Blocked Vents or Ductwork

If your air vents are located on the floor, it’s easy to accidentally block them with furniture. Check to make sure there’s nothing obstructing airflow for these vents, as it will “greatly hamper the AC’s ability to cool your home effectively,” Mitchell says.

Another thing to consider: If your ductwork is heavily soiled or blocked — say, by critter nests — that could also affect airflow. “Consider hiring a professional to clean it. Regular maintenance can help prevent such blockages,” Mitchell says.

A Thermostat That’s Set Too Low

While this reason might not make sense at first glance, it really can be preventing your home from cooling off. Setting your thermostat too low really impacts the way your unit works for your living space, Mitchells says. The too-low temp makes your unit work harder and uses way more energy — hence the high electricity bill at the end of the month. So how do you make the temperature comfortable and just “low enough?”

“The U.S. Department of Energy recommends a setting of 78 degrees Fahrenheit (25.5 degrees Celsius) when you’re at home during the summer months,” Mitchell says. If you’re not home and don’t have pets, consider setting it even higher than that — there’s little need to cool an empty space. 

Bare Windows

Direct sunlight is remarkably effective at raising the indoor temperature of your home, especially if your windows face south. Simply hanging thermal curtains that block out the sun during the day can make a big difference.

Up for a slightly bigger project? The U.S. Department of Energy says that installing awnings can decrease heat gain caused by the sun by 65 percent for south-facing windows and 77 percent for west-facing ones. 

An Outdated or Malfunctioning Unit

Much like anything in a home, the longer an air conditioner has been used, the less optimal the output. Your AC unit loses efficiency over time, which means it will have to work even harder to cool your space, resulting in higher energy costs and less comfort, says Mitchell. “Regular maintenance can help prolong your unit’s life, but eventually you’ll likely need to replace it with a newer, more efficient model,” he says. Your unit should be updated after 10 and 15 years of use.

Lack of Regular Maintenance

“Just like a car, AC units need regular tune-ups to operate efficiently,” Mitchell says. And Greg Donahue, product manager at Reliance Home Comfort, recommends having your AC unit serviced at least once a year. In fact, Donahue says, that step is actually required by most manufacturers in order to maintain their product warranty.

Simple maintenance tasks that should be performed more frequently include checking your air filters and your outdoor unit, says Mitchell. “Depending on the type of filter your AC unit uses and the air quality in your home, you may need to clean or replace your filters every one-to-three months,” he says. He adds that this helps maintain optimal airflow and efficiency and improves indoor air quality, too.

You should also regularly check your outdoor unit to ensure it’s free of debris like leaves or grass that could interfere with your system’s airflow. In the end, even if you have the best air conditioning unit money can buy, it will struggle to keep your home cool if you’re not giving it a little help along the way.

Keep reading on Apartment Therapy.

Related Links

• 8 Colors Interior Designers Say Their Clients Can’t Get Enough Of

• 4 Tips for Air Conditioning Care to Keep in Mind Over the Summer

• Today’s Housing Inventory Is a Sweet Spot for Sellers

If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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Search Homes in Oregon

Search homes in Minnesota

Just Listed: Excellent opportunity for redevelopment in an opportunity zone in Westminster!

Excellent opportunity for redevelopment in an opportunity zone in Westminster!

Currently zoned R-2, but may have future land use as R-18 which could allow up to 6 townhouse units per Westminster Comprehensive plan. Call Westminster Planning Office for further information at 303-658-2092. There are currently two homes plus a garage on the 1/3 acre lot. The primary home is 2 beds/1 bath. The additional home is 1 bed/1 bath. Keep the properties & update both to live in or rent out as investment OR scrape and build. The primary unit has a newer heater. Both units have newer water heaters and new sewer lines. Lot is on city water and city sewer. 3 access points to the property: Easement in perpetuity to the south of 7790 Lowell Blvd, and 2 driveways from Turnpike Drive. Easy access to Hwy 36, near Westminster Station, Westminster Arts District, and Westminster Recreation.

Listed by Christina Surprenant for West + Main Homes. Please contact Christina for current pricing + availability.

 

Have questions?
West + Main Homes
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hello@westandmain.com

Presented by:
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720-217-7835
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Just Listed: Exceptional 3 Bed + Den Ranch End-Unit Townhome with 2 Outdoor Living Spaces in Broomfield's Broadlands Community!

Exceptional 3 Bed + Den Ranch End-Unit Townhome with 2 Outdoor Living Spaces in Broomfield's Broadlands Community!

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Listed by Christina Surprenant for West + Main Homes. Please contact Christina for current pricing + availability.

 

Have questions?
West + Main Homes
(405) 652-6635
hello@westandmain.com

Presented by:
Christina Surprenant
720-217-7835
cmhomesteam@gmail.com

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Just Listed: Beautiful southwest facing corner lot in premier Coal Creek Ranch!

Beautiful southwest facing corner lot in premier Coal Creek Ranch!

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Listed by Christina Surprenant for West + Main Homes. Please contact Christina for current pricing + availability.

 

Have questions?
West + Main Homes
(405) 652-6635
hello@westandmain.com

Presented by:
Christina Surprenant
720-217-7835
cmhomesteam@gmail.com

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