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Housing starts dip in May but building permits rise

[Post Category: Industry News]

Housing starts dipped in May but building permits, a sign of future activity, rose as the housing market continues to show modest progress.

New-home construction edged down 0.3% from April to a seasonally adjusted rate of 1.16 million, the Commerce Department said Friday. That follows a 4.9% jump in April and was better than the 1.15 million expected by economists, according to Bloomberg.

housing starts

Building permits increased 0.7 % to 1.14 million in May, indicating some room for future gains in starts.

Monthly housing starts have hovered above 1 million for the past 12 months but remain below the 1.5 million that represents a healthy housing market. Still, housing starts are up 10.2% so far for the year.

Despite volatility, housing starts is “a bright spot in an otherwise supply constrained market,” said Ralph McLaughlin, chief economist at Trulia, a subsidiary of the Zillow Group.

Single-family housing starts in May were up 0.3% at 764,000, while groundbreaking of multi-family housing slipped 1.2% to 400,000.

Single-family housing starts are up 14.5% for 2016 and multi-family units are up 2.1%.

“Single family builders are slowly, but surely, gaining ground on what has been a strong four years for multifamily construction.” McLaughlin said. “We expect the relative rise in single-family starts to continue to into the remainder of the year as single-family builders play catch-up and rent increases soften in many major markets.”

Single-home starts in the Northeast surged 12.7% and saw increases in the South (2.6%) and the West (1.9%). The Midwest saw a decline of 14.7%. Multi-family unit starts rose in the Midwest and West but tumbled in the Northeast.

Permits for single homes, however, fell 2% and declined across the board except in the South, where they moved up slightly by 0.8%.

 

 

 

 

as appeared in USA Today






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