Housing Starts
New residential construction increased 14.6% in June to an annualized rate of 629,000 units. Both single and multi-family starts increased in June. Single family housing starts rose 9.4% to 549,000 while multi-family starts jumped nearly 32% to 170,000 units. Over the year total starts are up 16.7%. Building permits for new homes increased 2.5% to 624,000 in June and is 6.7% above the June 2010 estimate of 585,000.  Housing completions declined 1.7% in June to an annual rate of 535,000 from 544,000 in May. Single family completions were unchanged in June. Despite some positive news this month, the housing market remains extremely weak and we expect only modest improvement in the housing market this year.

Existing Home Sales
Existing home sales fell 0.8% in June to 4.77 million annualized units from 4.81 million in May. Over the year sales are down 8.8%. The inventory of unsold homes increased 3.3% to 3,765,000 from 3,646,000 in May. At the current sales rate the months’ supply is 9.5, up from 9.1 in May. Median home prices increased 8.9% in June, from $169,300 in May to $184,300. Over the past year prices are up 0.8%. Sales have declined over the past three months and we remain far from a healthy housing market.

Leading Indicators
The Conference Board’s index of leading indicators rose 0.3% in June led by the real money supply, the interest rate spread, and building permits, however gains were generally widespread. June was the second consecutive month of increases, though the pace slowed after rising 0.8% in May. Declines came from drags in stock prices, the index of consumer expectations, and average weekly manufacturing hours. The coincident index also improved, up 0.1% in June. The leading indicators have increased at a more rapid pace in the past two months and it appears that the economy should begin to see more robust growth in the second half of the year.