State’s Rights! It helps the housing market.
U.S. housing starts unexpectedly surged the most in more than two years in June because of a change in New York City’s building code that overshadowed a slide in single-family home construction.
Housing starts rose 9.1 percent to a 1.066 million pace from a revised 977,000 rate in May, the Commerce Department said today in Washington. Excluding a jump in construction of multifamily units in the Northeast, starts would have dropped 4 percent. Work began on single-family homes at the slowest pace in 17 years.
Rising foreclosures, higher mortgage rates and declining property values threaten to keep home sales depressed in coming months, discouraging builders from starting new projects during the worst housing slump in 25 years. Spending on residential projects may continue to be a drag on growth the rest of this year as builders try to work off excess inventories.
Economists forecast the pace of starts would decline to 960,000, from a previously reported 975,000 for May, according to the median on 76 projections in a Bloomberg News survey. Estimates ranged from 925,000 to 1.03 million.
A new construction code that took effect in New York City on July 1 prompted builders to start construction on, and seek permits for, condos and apartments a month earlier, Commerce said.
Building permits rose 11.6 percent to a 1.091 million rate in June. Excluding the Northeast, permits would have risen 0.7 percent.
Work on single-family homes decreased 5.3 percent to a 647,000 pace, the weakest since January 1991, Commerce said. Construction of multifamily homes, such as townhouses and apartment buildings, jumped 43 percent to an annual rate of 419,000 in June, led by the Northeast.
When legislators do the right thing, local economies grow and cause a ripple effect that creates good things across the nation.
