US housing starts drop for 3rd straight month

  • US housing starts drop for 3rd straight month

US housing starts drop for 3rd straight month

Single-family building permits fell 1.9 per cent to a 779,000 unit-rate. That was the lowest level since September 2016 and confounded economists' expectations for a rise to a 1.22 million-unit pace. The report also showed that multifamily housing starts have now fallen for five straight months.

Housing starts fell 5.5% in May to a seasonally adjusted annual rate of 1.092 million, down from April's downward-revised 1.156 million, the Commerce Department reported Friday.

Single-family housing starts saw a drop of 32,000 on the month, with the multi-family segment down by the same amount. They've especially pared back on apartment buildings and other large multi-dwelling units, giving more emphasis to single-family homes.

US housing starts continued to fall in May, marking a third straight fall and erasing the gains recorded at the beginning of the year. It has clearly arrived, and it is significant enough to tip my rating of the housing market as a long leading indicator all the way to negative, pending next week's report on single family home sales, which becomes all the more important.

Single-family housing starts in May were at a rate of 794,000; this is 3.9% below the revised April figure of 826,000.

US homebuilders have stayed confident. But, in the South it was tumbled by 8.9% and in the West by 4.9%.

"Today's Census Bureau report for May signals further supply shortages in the housing market", Fleming said.

Granger MacDonald, Chairman of the NAHB, is confident that production-at least in the single-family sector-will improve as the year goes on. Any number over 50 indicates that more builders view conditions as good than poor.

Rather than demand for housing, economists blame the moderation on supply constraints, which has remained underpinned by a strong labor market. South recorded a decline of 51k in May, whereas the Midwest region saw a decline from a stellar reading last month. In all, builders continue to be positive, with the June NAHB survey reporting a sound level of sentiment. "One thing that moving up is the housing costs for consumers: higher home prices and higher rents".