New-home construction was little changed in May, a sign the residential real-estate industry will add little to economic growth in the second quarter.
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Housing starts fell 0.3% at a seasonally adjusted annual rate of 1.16 million, a decline that was lower than expected. That was better than 1.15 million expected by economists, according to Bloomberg. “We’re still very far from a boom period in housing at all here, but I think the fundamentals are still pretty good”.
Building permits increased 0.7 % to 1.13 million, indicating some room for gains in starts. The April figure was revised slightly down, leaving the rounded reading at 1.17 million.
Building permits rose 0.7 per cent to a 1.14 million-unit rate last month.
USA housing starts slipped in May as the construction of multifamily housing units dropped, but further gains in building permits suggested a rebound that would continue to support economic growth in the second quarter. In the West, groundbreaking on single-family housing projects rose 1.9 per cent.
Permits for new single-family homes fell 2% month over month in May, to an adjusted annual rate of 726,000, from a revised total of 741,000 in April.
Housing starts for the volatile multifamily segment fell 1.2 per cent to a 400,000-unit pace.
“The weakness in starts is signaled by the prior drop in permits, which lead starts by a month or two”, said Pantheon Macroeconomics’ Ian Shepherdson.
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Single-family home starts rose 0.3 percent to a rate of 764,000 and are up 10.1 percent year over year. The company’s latest data analysis determined that home sales in May increased 10.3 percent from April and were 5.1 percent higher from a year earlier.
