New Housing Starts Up – NYC Saves the Day

New housing construction starts are 10 percent above the projected amount and the New York market has played a bid role in this increase.

by James R. Lindamood 

Thanks to changing real-estate codes in New York City, new housing starts in June came in significantly over expectations. Over one million new housing starts came in during the month of June, well over the 975,000 mark predicted the month before. This increase of nearly 10 percent above expectations is due in large part to new, “Construction codes effective for permits authorized as of July 1, 2008,” according the U.S. Department of Commerce.

This major increase in single and multi-family dwellings in New York City caused the numbers to fly past the 1 million mark. These authorizations account for a significant portion of the new construction in the Northeast. When you count the single family starts alone, the numbers have actually fallen from last month, to fewer than 650 thousand new housing starts.

However, looking forward brings a little sun on the horizon, since building permits issued for future development in June, showing an increase of 11.6 percent from the previous month. Granted, with the change in building codes causing an increase in permit issues the market is still on the slump, but isn't it good to know that things aren't as bad as we might have thought?

These new permits show a marked increase in the amount of multi-family units going on the market. This, of course, affects the rental market more than the mortgage market, but renters pay their bills just the same as everyone else. One thing that renters will be glad to hear is that, traditionally, the more rental units that come on the market, the less extreme the changes in rent from one rent cycle to the next.