Housing starts and completions dip in May

Permit activity picks up, especially in the singe-family sector

Privately owned housing starts dropped 0.9 percent month-over-month and 4.7 percent year-over-year in June, with the biggest declines coming for single-family homes, according to the latest data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

“This month’s overall pace of housing starts, 1.27 million units, sends a mixed message for the housing market – fewer new homes coming to the market in the short term, but some hope of more housing supply in the not too distant future,” Odeta Kushi, First American’s deputy chief economist said in a statement. “U.S. homebuilding fell in May, with housing starts declining 4.7 percent compared with one year ago. The decline will be discouraging for home buyers as it signals less supply for a housing market in need of a supply surge.”

Single-family housing starts in May came in at a rate of 820,000, a month-over-month decline of 6.4 percent.

The rate of housing completions saw a much greater short-term decline, falling 9.5 percent month-over-month and 2.8 percent year-over-year. Single-family completions were down 5 percent month-over-month.

There is some good news, however, as permit activity ticked up slightly, especially for single-family homes. Privately-owned housing units authorized by permits in May were up 0.3 percent month-over-month, but down 0.5 percent year-over-year. Single-family authorizations were up 3.7 percent.

“The bright spot in an otherwise underwhelming report comes from the overall number of permits issued, which can signal how much construction is in the pipeline,”Kushi said. “Building permits experienced the highest monthly rate of growth since December – indicating more construction may be on the horizon.”

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