Single-family housing starts edged up to a seasonally adjusted annual rate of 764,000 in May, according to the new residential construction report released by the Department of Commerce Friday morning. May's reading marks a 0.3% increase month-over-month, and 9.5% gain year-over-year--welcome news in the wake of the latest jobs report, when the BLS reported that job creation in the U.S. had slumped to a five-year low. The relieving results in starts support builders' positive outlook on single-family sales that BUILDER recently reported.
This month, single-family construction moved up to an annual rate of 435,000, up 0.9% from April's downwardly revised 431,000. Permits issued for privately-owned one-unit structures, however, edged lower by -2.0% to a seasonally adjusted annual rate of 726,000, signaling that builders are becoming more cautious once spring-selling season is over. Housing permits for all privately-owned housing also increased a moderate 0.7% month-over-month to a seasonally adjusted 1,138,000, primarily due to the uptick in permits issued for multifamily units over five.
Regionally, permits issued for one-unit structures picked up 0.8% in the South, the only place with month-over-month growth. The Midwest saw a -3.5% month-over-month decline in single-family permits, while the Northeast and the West dropped -8.9% and -5.1%, respectively. Builders in the Northeast and West are facing multiple obstacles, primarily low lot inventory and inflated prices. Last month, the Commerce Department reported that permits issued for one-unit structures in the West dropped -10.7%, signaling a hard time ahead for home builders in the West.
In this month, privately-owned housing completions rose 5.1% to a seasonally adjusted annual rate of 988,000, with completed single-family homes growing 2.3% to 717,000 and multi-family homes jumping 14.3% to 263,000. The South reported an a 12.0% year-over-year gain of 401,000 newly finished single-family homes in May, more than the other three regions combined. The Northeast, albeit the smallest market for single-family completions, snagged the biggest year-over-year growth of 14.3%.
Read the full release from the Commerce Department here>>
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