If you really want to sound like you know what you’re talking about when you’re talking about the economy, you gotta pay attention to housing starts.
Housing starts track how many homes builders are putting up and planning to build in the future. Homebuilders are some of the most economically sensitive businesses out there, so they’re super useful as a canary in the coal mine to check on the health of the wider economy.
So what does the Census Bureau’s latest data on housing starts and building permits tell us?
JUNE 2019 HOUSING STARTS AND BUILD PERMITS
– 1,220,000 build permits issued
– Construction started on 1,253,000 new homes
– Builders finished 1,161,000 new homes in June
– Single-family build permits up 0.4% from May to June at 813,000
– Overall permits down 6.1% from May 2019
– Single-family home starts up 3.5% from May at 847,000
– Single-family completions down 1.8% from May at 870,000
Are these numbers a dead canary in the coal mine? Not quite.
While homebuilding as a whole looks like it’s slowing down, which looks bad, there is still good news here. Single-family home starts are growing, continuing a trend from last month.
Single-family permits were up 0.4% and starts were up 3.5% from May.
This shows us there’s still a healthy appetite for the American Dream from homebuyers, and homebuilders think the economics are worth building more homes.
And since all those homebuyers head right to Ikea and Target to furnish their homes once they’re finished, single-family starts mean a lot of economic activity will follow.
Given that mortgage rates are still low, it’s possible we could see this trend play out for a while as homebuyers take advantage of cheaper financing.
More economic analysis below. Follow along as we continue to track this for you.