Wednesday, 22 September 2021

Housing starts continue downward trend in June

SACRAMENTO – Single-family housing production in June rebounded slightly from May, but both single-family and total production remain at levels well below last year at this time, the California Building Industry Association has reported.


Robert Rivinius, the association's president and chief executive officer, said the continued downturn in housing production makes it even more urgent that Congress and the president quickly agree on a comprehensive housing stimulus package that will help get the industry moving again.


“House and Senate leaders are working to complete action on legislation in the very near future that could stabilize Fannie Mae and Freddie Mac, the government-sponsored lending giants, permanently raise conforming loan limits and create a much-needed first-time buyer tax credit,” Rivinius said.


“California homebuilders urge Congress and the president to quickly act to protect the American dream of homeownership and to help the industry recover from the worst downturn since World War II.”


According to statistics compiled by the Construction Industry Research Board, homebuilders around the state obtained 6,443 building permits during June, down 10.8 percent from May and down 43.9 percent from June 2007.


Single-family permits totaled 3,954, up 9.2 percent from May but down 54.9 percent from June 2007, while multifamily permits totaled 2,489, down 30.9 percent from May and 16.8 percent from June 2007.


During the first half of 2008, housing starts totaled 36,282, down 43.9 percent from the same period a year ago. Single-family starts were down by 54.9 percent and multifamily starts for condos and apartments declined by 22.2 percent. (A PDF table listing permit activity by metropolitan area is available here.)


CIRB now projects that for the entire year, only 77,600 permits will be pulled, forecasts that have been trending downward every month this year. CBIA’s chief economist, Alan Nevin, issued an even gloomier forecast at PCBC The Premier Building Show last month, projecting just 72,000 starts for the year.


Nevin noted that fully one-third of the decline in single-family housing starts took place in the Riverside/San Bernardino area, where permits declined from 11,023 in the first six months of 2007 to 3,473 in the first six months of 2008. In comparison, just three years ago, single-family permit activity in the Inland Empire totaled 31,529 units.


“As a result of urban apartment construction, the decline in multifamily construction was spread relatively evenly across the state,” Nevin said. “The decline in single-family permits is greatest in those locales that are most distance from employment centers, while the multifamily activity tends to be highly urban and proximate to employment centers. We see this as a continuing trend.”


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