Housing starts tick up in June after hitting 5-year low
Private home building came in at a seasonally adjusted annual rate of 1.32 million new houses in June, the Commerce Department reported Friday.
The number was up about 4.6 percent from May but still half a percent lower than June of last year.
After rising during the economic rebound from the pandemic, housing construction has languished since 2022.
Housing completions fell off a cliff in June, dropping by almost 15 percent on a seasonally adjusted basis from May. That's the lowest rate since January 2022.
Permits to build new houses stayed flat from May to June at a rate of about 1.4 million.
The U.S. is experiencing a massive housing shortage, which is at the root of the country's housing affordability crisis, according to the Joint Center for Housing Studies at Harvard University.
Public mortgage backer Freddie Mac put the shortage at 3.7 million units in the third quarter of last year, though estimates have a significant range. The National Association of Realtors put the shortfall at 5.5 million units in 2021. The National Association of Home Builders put it at 1.5 million units in the same year.
Elevated interest rates have weighed on the housing sector in the short-term, but with the huge lack of low-cost housing across the country, it's not exactly clear why this isn't translating to high economic demand.
In a plan to address the shortage, the National Association of Homebuilders pointed to a variety of factors — notably regional zoning laws that prohibit density of construction.
'Localities need to rework their zoning plans to increase density and allow more flexibility for developers,' the group said in its plan.
In March, the heads of the departments of the Interior and Housing and Urban Development announced a plan to open up federal land to build affordable housing.
Jon Raby, acting head of the Bureau of Land Management, told Bloomberg News in March that the agency is considering selling about 625 square miles of federal lands 'around cities large and small.'
One of President Trump's campaign proposals touted suburban areas of the U.S. as localities in which to foster the 'American dream.'
Conservation-focused group the Center for Western Priorities described the proposal as a 'sprawl plan.'
'Get ready for a housing development to pave over your favorite hiking trail,' the group's deputy director Aaron Weiss said in a statement.
The Associated Press obtained documents in March showing that the Trump administration has 'stalled at least $60 million in funding intended largely for affordable housing developments nationwide.'
Republicans' recent large-scale tax-and-spending cut bill made a 12-percent increase in certain allocations of low-income housing tax credits starting in 2026, while reducing private bonds requirements.
The National League of Cities organization said the changes could help 'finance the production or preservation of approximately one million additional affordable rental homes over 10 years.'
The bill also expanded the investment-incentive program for so-called opportunity zones, with a special focus on rural areas, which analysts say didn't get enough attention in the program's first iteration.
'Investment often flowed into neighborhoods that were already receiving significant investments, leaving many of the most distressed communities behind,' attorneys for law firm Pillsbury wrote in an analysis of the legislation.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Washington Post
4 minutes ago
- Washington Post
Trump hosts Starmer in Scotland, promoting his own golf club
EDINBURGH, Scotland — President Donald Trump has transformed the private green at his Turnberry golf course into a venue for high-stakes diplomacy. British Prime Minister Keir Starmer arrived Monday morning to meet with the president near the fairway to hash out a trade deal and discuss the wars in Gaza and Ukraine. On Sunday, European Union Commission President Ursula von der Leyen announced the contours of a trade deal at the private club. The meetings provide the latest example of how Trump uses his presidential power not only to govern, but also to help his family businesses. The engagements provide publicity for the courses and funnel taxpayer funds to the Trump Organization, as the U.S. government pays to lodge staff and security details at the properties. Traditionally, American presidents are invited to other countries by their leaders and hosted at diplomatic residences. But Trump is playing host to Starmer in the prime minister's own country, continuing his long tradition of sidestepping presidential norms to mix his family business and his public office. 'It is an unusual dynamic, but that is more of an issue for the U.S.,' said David Henig, director of the U.K. Trade Policy Project for the European Centre for International Political Economy. 'U.K. prime ministers have always said, we will just deal with the U.S. presidents as we find them.' Asked about the potential conflicts of interest, White House officials noted that the golf courses are held in a trust managed by Trump's children. 'President Trump's working trip to Scotland has already been a huge success, securing a historic trade agreement with the EU. President Trump is always acting in the best interest of the American people delivering GOOD deals that put America First,' White House spokeswoman Taylor Rogers said in a written statement. 'Donald J. Trump has built the best and most beautiful world-class golf courses anywhere in the world, which is why they continue to be used for prestigious tournaments and by the most elite players in the sport.' Trump and Starmer told reporters Monday that they plan to discuss tariffs — including those levied on whisky — and aid to Gaza and Ukraine. In an exchange with reporters as Starmer arrived, Trump said he plans to shorten the 50-day deadline he gave Russian President Vladimir Putin to reach a ceasefire in Ukraine, reflecting his mounting frustration with the Kremlin. He also repeated his complaint that no one has said 'thank you' for aid the United States has sent to Gaza for food, where deaths from starvation and malnutrition are rising, and stressed his continued focus on rescuing Israeli hostages. Trump's visit, which includes the opening of a new golf course in Aberdeenshire, on Scotland's east coast, will cost American taxpayers millions of dollars for travel and security. While all other presidents in the era of jet travel have regularly used Air Force One for personal travel and are protected by the Secret Service as they do so, the government was not paying hotel fees to businesses they owned to house security details or White House staff. The U.S. government paid $68,800 to Trump's Turnberry resort in 2018 to cover the cost of Trump's visit to the course on Scotland's west coast during his first term, according to a report in the Scotsman newspaper. In between negotiating trade accords and batting back questions about the Jeffrey Epstein files, Trump used his time in Scotland over the weekend to promote the course. He posted videos of himself golfing on Truth Social, the social network he partially owns. He also cited praise from the retired professional golfer Gary Player. 'The Great Gary Player: 'Turnberry is, without a question, in the Top Five Greatest Golf Courses I've ever played in my 73 years as a Pro.' Thank you, Gary!'' he wrote. Trump Turnberry was one of Trump's most expensive properties and has struggled to turn a profit since his company purchased it in 2014. Trump spent $67 million to buy the property and an additional $144 million to renovate it. The course lost $1.7 million in the 2023 fiscal year, according to a filing from the company which operates the course. Trump has some supporters in the Turnberry area, where his club is a significant employer, but also many detractors. Scotts have hosted demonstrations across the country this week in protest of his stay. 'We're operating in nonstandard territory in terms of seeing him using Scotland as just a meeting room and use his properties as a venue for trade talks,' said Jack Nevin, who organized a protest Saturday in Edinburgh on behalf of Stop Trump Coalition. 'It's par for the course with his rank corruption and promoting his own businesses as president.' Amy B Wang contributed to this report.
The Hill
6 minutes ago
- The Hill
Former ambassador to EU: 15 percent tariff can be baked into profit margins
President Trump's first-term ambassador to the European Union, Gordon Sondland, brushed off concerns on Sunday about higher prices for Americans following news of the U.S.-EU trade deal, which set tariffs at 15 percent on European goods. In an interview with CNN's Jessica Dean, Sondland was asked to respond to folks who see the 15 percent tariff on imported goods and are worried that, for example, their perfume bottles from France will now be 15 percent more expensive. He said Americans might initially see higher prices, but they will soon adjust as competition returns to the market. 'At 15 percent, I think consumers will initially pay, but I also think that this will be baked into the profit margins — or a reduction of the profit margins — on a lot of these products, because the market will start to pull prices back down again as there's more competition,' he said. Sondland said a 15 percent rate will generate enough revenue to make a dent in the reduction of the annual deficit. 'I think at a 15 percent tariff, it's enough to generate. If everything that we imported bore a 15 percent tariff, that would generate about $450 billion for the United States Treasury, which would make an enormous dent in our annual deficit,' Sondland said. 'If the tariff were 30 or 40 or 50 percent, that would be an absolute shutdown, so that wouldn't work. But 10 to 15, I think we can swallow it, and I think it's going to generate a tremendous amount of money if Congress doesn't piss it away on other things,' he added. Trump and President of the European Commission Ursula von der Leyen announced a trade deal on Sunday, setting tariffs at 15 percent for European goods, including automobiles. The European Union will purchase $750 billion worth of energy from the U.S. as part of the deal, Trump announced, and agreed to invest in the U.S. $600 billion more than the current investments for other goods. The agreement is lower than the 30 percent tariff Trump had threatened to impose on the EU, which would have begun on Friday, and avoids a trade war with the U.S.'s largest trading partner.
The Hill
6 minutes ago
- The Hill
US and China officials meet in Stockholm to discuss how to ease trade tensions
STOCKHOLM, Sweden (AP) — Top trade officials from China and the United States arrived for a new round of talks in Stockholm on Monday in a bid to ease tensions over trade between the world's two biggest national economies. U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng were meeting at the offices of Sweden's prime minister for talks that Bessent has said will likely to lead to an extension of current tariff levels. Analysts say the two envoys could set the stage for a possible meeting between U.S. President Donald Trump and Chinese President Xi Jinping later this year to cement a recent thaw in trade tensions. The talks are the third this year between He and Bessent — nearly four months after Trump upended global trade with his sweeping tariff proposals, including an import tax that shot up to 145% on Chinese goods. China quickly retaliated, sending global financial markets into a temporary tailspin. The Stockholm meeting — following similar talks in Geneva and London in recent months — is set to extend a 90-day pause on those tariffs. During the pause, U.S. tariffs were lowered to 30% on Chinese goods, and China set a 10% tariff on U.S. products. The Trump administration, fresh off a deal on tariffs with the European Union, wants to reduce a trade deficit that came in at $904 billion overall last year — including a nearly $300 billion trade deficit with China alone. China's Commerce Ministry, for its part, said last week that Beijing wants 'more consensus and cooperation and less misperception' from the Stockholm talks.
