Implications: Housing starts fell again in June, the second straight monthly decline after a surge in starts in the first four months of the year. Meanwhile, housing completions soared in June, jumping 26.2%, the largest monthly gain on record (going back to the late 1960s). Apparently, home builders have been shifting their resources away from "breaking ground" and toward finishing the homes they already had under construction. This is consistent with the artificial deadline created by the new homebuyer credit, where buyers have to settle on their homes by the end of June. (Typically, new homes are not brought to settlement until the house is substantially completed.) As a result, with the June deadline now behind us, we anticipate that housing starts will begin to grow again in July. Even at the slow rate of new home sales we are now experiencing, the pace of housing starts is so slow that new home inventories will continue to decline, helping clear the way for a housing recovery.
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