|
Housing Starts Rise in May, But Permits Dip
Total housing starts rebounded from a 13-month low to increase 5.0% in May as builders worked down a backlog of unfilled orders under unusually good weather conditions, according the latest Commerce Department figures.
But the government also reported that the issuance of new building permits dropped 2.1% for the month, continuing the moderate downslide from the peak last September.
“Builders have been drawing down the backlog of unused permits for houses sold earlier,” said NAHB President David Pressly. “Many builders have reported in recent NAHB surveys that they are offering incentives to limit the number of potential cancellations.”
“This increase is not inconsistent with an ongoing moderate erosion of housing market activity, a pattern shown by both today’s permit numbers and NAHB’s surveys of single-family home builders,” said NAHB Chief Economist David Seiders. “The builders still are reporting reductions in housing demand, and we expect both housing starts and building permits to lose some ground as 2006 progresses."
The pace of construction rose to a seasonally adjusted annual rate of 1.957 million units — 3.8% below the pace of a year ago. Permits dipped to a monthly rate of 1.932 million units — 8.5% lower than the year before.
“The rebound in total housing starts for May primarily reflected typical volatility in the multifamily market, and the modest increase in single-family starts largely reflected a buildout of units that had been sold and permitted earlier,” Seiders said. “Strong numbers in the South and West may also have been supported by some rebuilding in the wake of last year’s record-breaking hurricane season.”
Single-family housing starts were up 2.1% in May to a pace of 1.586 million units for the month. Multifamily housing construction rose 19.7% for the month to a seasonally adjusted pace of 371,000 units.
Three of four regions reported increases in housing starts for the month. Construction of new homes and apartments rose 1.7% in the Northeast, 8.5% in the South and 15.8% in the West. Housing starts were down 15.8% in the Midwest, following a sizeable increase in April.
Single-family permits were down 2.1% on a national basis to a pace of 1.466 million units. The pace of multifamily permits also dipped 2.1% to a pace of 466,000 units for the month.
 Want to Know Your State's Starts Forecast for 2007?
Find out in HousingEconomics.com’s State Starts Forecast (sample). The starts forecast includes downloadable Excel tables of total, single-family and multifamily starts by region and state.
To learn more, visit www.housingeconomics.com.
Seiders Says, 'Builders Have Not Lost Touch With Demand' on the NAHB Economics Blog
NAHB Chief Economist David Seiders says that "builders have not lost touch with demand" on NAHB's economics blog, “Seiders on Housing” — an informal Internet-based forum dealing with economic issues, housing trends, survey research and other topics affecting the housing sector of the economy.
Log on at http://nahbblog.blogs.com and get direct access to Seiders' expert opinions, projections and responses. Then let Seiders know what you think by giving your perspective.
|
