Housing Starts Leap in May

(Courtesy HUD/Census Bureau)

Privately owned housing starts in May hit a seasonally adjusted annual rate of 1,631,000, the Census Bureau and Department of Housing and Urban Development jointly reported Tuesday.

The May numbers were 21.7% above the revised April estimate of 1,340,000 and up 5.7% year-over-year. The May rate for units in buildings with five units or more hit 624,000

Single-family housing starts were just shy of 1 million at 997,000, or 18.5% above the revised April figure.

“In percentage terms, that’s the largest single-month jump since June 2020, which occurred due to a rebound from the initial shock of the COVID pandemic. While continued growth in new home construction is consistent with improving home builder sentiment and ongoing lack of existing homes for sale, we believe some of the reported strength in starts is likely statistical noise,” said Doug Duncan, Chief Economist at Fannie Mae.

Privately owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 1,491,000, up 5.2% from April, but down year-over-year by 12.7%.

Single-family authorizations hit 897,000, up 4.8% from April. Authorizations of units in buildings with five units or more were at a rate of 542,000 in May.

Additionally, privately owned housing completions were at a seasonally adjusted annual rate of 1,518,000 in May, 9.5% above the revised April figure and 5% above May 2022. Single‐family housing completions in May were at a rate of 1,009,000 or 3.9% above the revised April rate of 971,000. The May rate for units in buildings with five units or more was 493,000.

“Homebuilder sentiment increased above 50 in June for the first time since July 2022, meaning builders consider conditions to be ‘good’ overall. All three components of the index–current sales conditions, sales expectations in the next six months and buyer traffic–increased,” said First American Economist Ksenia Potapov.