Midwest Leads the Charge in Rising Housing Starts Despite National Slump

While existing home sales have slowed, there are promising new signs for new home construction, particularly in the Midwest. U.S. Census statistics showed annual housing starts rising 2.0% in June over the same month in 2023. June seasonally adjusted Midwest housing starts for June at an annual rate of 208,000 jumped 15.6% over May’s number, which had shown a decrease.

The Midwest regional June housing start statistics were much better than national trends, which increased only 3.4% over May and decreased 3.1% from the prior June.

The future construction picture for the Midwest also looked brighter. The number of housing units authorized but not started in June was up 19% over June of 2023.

While average 30-year mortgage rates are high by recent standards, they have dropped recently. As of August 8, the average was 6.47% down from nearly 7.25% one year earlier.

If hints from Federal Reserve Chairman Jay Powell prove to reflect reality, the interest trend might improve at the Fed’s September 17-18 meeting. While Powell has not promised a cut in the Fed’s benchmark rate, he has suggested conditions for that decision have improved with recent lower inflation.

Lumber and timber industry watchers follow housing, particularly closely because of the volume that flows to new home construction directly for pine and directly and indirectly for hardwood lumber products.