NJ Homebuilding Drops In June
by Patrick J. O'Keefe, Director of Economic Research
New Jersey homebuilders obtained 2,263 building permits (i.e., authorizations to begin construction) in June. This was 11.7% less than May’s total, which was the third highest number of monthly approvals since mid-2008. [Chart 1]
Despite June’s deceleration, the first half of 2014 was the best start for homebuilding in New Jersey since 2006. Year-to-date authorizations totaled 13,832, more than one-quarter (28.7%) greater than 2013’s comparable period. [Chart 6]
Authorizations of multifamily (i.e., attached) dwellings led the year-to-date advance, accounting for 61.2% of all approvals. This was the largest multifamily share for the first half of any year since the 1960s. [Charts 4 and 11]
Single-family approvals slipped in June for only the third time in ten years. Nevertheless, the three-month average of single-family permits was equivalent to the level maintained throughout the second half of 2013. [Charts 7 and 8]
Permit data (especially multifamily authorizations) tend to be volatile month-to-month and, like many economic indicators, vary seasonally. Adjusting for those factors – by using a three-month moving average of seasonally adjusted data – residential authorizations slipped from May, but were still the highest since December 2007 and more than double the housing contraction’s mid-2009 nadir. [Chart 6]
Despite those gains, the seasonally adjusted, three month-average of approvals in June was two-fifths (-39.5%) less than June 2005, when the seasonally adjusted three-month average peaked at 3,297 units.
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