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Housing starts rise in May, but building permits fall

by John Yellig

May housing starts rose 3.6% above the revised April estimate to an annual, seasonally adjusted rate of 1,572,000, the U.S. Census Bureau and Department of Housing and Urban Development reported. 

The rate was 50.3% above the year-ago pace of 1,046,000. 

Single-family housing starts were up 4.2% from April and 49.8% from May 2020, at 1,098,000, while multifamily starts were up 4.0% monthly and 52.5% yearly, at 465,000. 

Building permits for privately owned homes fell 3% from the downwardly revised April rate of 1,733,000 to 1,681,000. Year over year, however, building permits were up 34.9%. 

Housing completions fell 4.1% month over month in May to 1,368,000, representing a 16.1% increase from the year-ago rate of 1,178,000. 

By region, single-family housing starts fell in the Northeast, with a 13.7% drop to 63,000, while they rose in the other three regions, led by the Midwest, with a 16.6% increase to 169,000. The South saw a 2.8% increase to 591,000 units, while homebuilding in the West produced an estimated 275,000 new homes for a 5.4% monthly gain. 

“The good news is that the number of residential construction workers has increased in 12 of the last 13 months and is above the pre-pandemic level,” First American deputy chief economist Odeta Kushi said. “The fundamentals driving new home sales are strong — low rates, limited supply of existing homes for sale and demand driven by millennials.” 

 

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