Building permits continued to climb moving up by 7.4% in the month of June representing a 5.1% increase over last year. The number of permits reached 1.254 million. Housing starts also continued to climb by 8.3% in the month of June improving 2.1% over last year. The final step in a permit and start is a completed home which reached 1.203 million. This is an increase of 5.2% in the month of June and a 8.1% increase over the previous year.
Existing home sales moved up this month by 1.1% reaching an annualized rate of 5.6% over the previous 12 months. This activity is important because existing housing represents over 90% of all housing related activity. The median sales price increased as well by 5.8% to $252,800. When I see this number, I am constantly reminded of how much housing has increased over the years. It was not too long ago the median price had just moved beyond $100,000 and at the time it was considered an outlandish price to pay for a home.
Housing starts fell 5.5% in May to 1.092 million units (annual rate). Residential permits also slowed by 4.9% to 1.168 million units. The construction of new homes has taken a pause over the past several months. This appears to be a short term slowdown rather than a longer term trend change in direction. The other economic factors in housing are all supporting a continuation of growth.
Housing sales of previously owned houses fell 2.3% in April to 5.57 million units, but this should not be such a surprise since the previous month reached a 10 year high. Gains over the past 12 months might be more indicative of the continuing improvement in housing with a gain of 1.6%. There is an increasing shortage of houses reflected in the most recent supply level at 4.2 months; a normal market is 6 months. The shortage is pushing median prices up and they have now reached $244,800. Given the longer trend to the upside we believe housing is still improving.
Housing starts declined for the month by 2.6% to a 1.172 million units annual rate. While permits also slowed by 2.5% to 1.299 million unit annual rate. This may initially look to be a troubling market, but when examined on a longer term basis we see a different picture. On an annual basis starts are up 0.7% while permits are up 5.7%.