U.S. homebuilding accelerated for a second month in June despite an ongoing materials shortage.
Housing starts rose 6.3% last month to a seasonally adjusted annualized rate of 1.643 million, the Commerce Department said Tuesday, exceeding the 1.59 million that analysts surveyed by Refinitiv were expecting. May’s reading was revised higher to 1.546 million.
Meanwhile, permits for future construction fell 5.1% to a rate of 1.598 million units, the lowest since October. Analysts had expected a reading of 1.68 million.
Homebuilders in recent months have been grappling with materials shortages and higher input costs which have held back permitting and building and weighed on confidence.
The cost of strand board, a common material used in homebuilding, for example, has soared more than 500% this year. Rising lumber prices have added $36,000 to the price of building a new home, pricing some buyers out of the market.
The supply chain issues have frustrated builders.
A survey released Monday by the National Association of Home Builders showed confidence last month fell one point to 80, the lowest since August 2020.