Housing Starts and Permits Post Gains in May
Nationwide housing starts rebounded in May from record lows in the previous month, posting a 17.2% gain to a seasonally adjusted annual rate of 532,000 units, according to U.S. Commerce Department figures released on June 16.
While driven largely by a double-digit gain in the volatile multifamily sector, the uptick also reflected a substantial gain on the single-family side and applied consistently to all regions of the country.
“Having drawn down standing inventories to very thin levels over the past year, some home builders are now carefully replenishing their supplies in response to demand from smart buyers who are taking advantage of low interest rates and prices,” said NAHB Chairman Joe Robson.
“The May report showing three consecutive months of gains in single-family housing starts and two consecutive months of gains in single-family permits is a very welcome sign that the market may be nearing a turning point,” said NAHB Chief Economist David Crowe.
“That said, our recent surveys tell us that builders remain very cautious about the future, and that they are aware of the upcoming expiration of the first-time buyer tax credit at the end of November,” Crowe added. “Homes that get started now should be able to close by that deadline, and this may be spurring some of the latest construction activity.”
Single-family housing starts gained 7.5% in May, breaking the 400,000 mark for the first time since November 2008 to reach a seasonally adjusted annual rate of 401,000 units. Meanwhile, starts in the much more volatile multifamily sector posted a 77% gain following a nearly equivalent decline in the previous month, for a seasonally adjusted annual rate of 124,000 units.
Building permit issuance, which can be an indicator of future building activity, rose 4% overall in May to a seasonally adjusted annual rate of 518,000 units. On the single-family side, permits rose 7.9% to 408,000 units, while on the multifamily side, they declined 8.3% to 110,000 units.
Both housing starts and permits were up across every region in May. Starts rose 2% in the Northeast, 11.1% in the Midwest, 16.8% in the South and 28.6% in the West.
Permits rose 5.7% in the Northeast, 8.9% in the Midwest, 2.3% in the South and 3.8% in the West.
Tax Credit Web Site Looks at Opportunity of a Lifetime
Builders and other industry professionals can help spur home sales by referring prospective first-time home buyers to www.federalhousingtaxcredit.com. The NAHB Web site provides detailed information on the $8,000 federal tax credit for first-time home buyers included in the economic stimulus legislation signed into law by President Obama.
Consumers can use the Web site to find information on the tax credit — including a detailed question and answer section. It also includes information about other housing-related and small business measures in the legislation and a number of home-buying resources for consumers.
Spanish Version Also Available Online
A Spanish version of this increasingly popular Web site is also available to provide detailed information on the tax credit to Spanish-speaking first-time home buyers.
Industry professionals are encouraged to highlight either tax credit Web site when marketing to their potential first-time home buyer market.
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