As the economy reopened for most states in June, there was a 17.3% upswing in housing construction, but the total production is still lower than it was before the lockdown.
The Commerce Department reported Friday that new homes were started in June at a seasonally adjusted rate of 1,186,000, following steep declines in March and April, and a modest recovery in May. But construction still is 4% lower than it was this time last year.
Applications for new building permits, a good indicator of future activity, rose 2.1%
With one of the lowest mortgage rates in fifty years, it was thought that this would drive a housing boom, and while it is a seller’s market in some states, the boom is not coming—especially in regions still feeling strong effects of the pandemic such as the South and Southwest.
Regionally, construction grew everywhere except the West, where it declined by 7.5% but that was after the West’s massive May increase of 69.8%. In June, the Northeast was by far the leader, at 114%, followed by the Midwest at 29.3%.
On July 16th, the National Association of Home Builders/Wells Fargo study of builder confidence jumped for the second straight month to a reading of 72, near pre-pandemic levels.