Housing starts 17% higher in May

Some good news in the housing sector:

Housing starts increased 17.2% to a seasonally adjusted 532,000 annual rate compared to the prior month, the Commerce Department said Tuesday. Building permits rose; apartment construction surged.

The 17.2% increase was much bigger than expected. Economists surveyed by Dow Jones Newswires forecast a 7.0% increase to an annual rate of 490,000.

But amidst this report, there are still concerns about the high level of inventory that exist alongside consumer woes about the rising unemployment, rising mortgage rates, and the tight credit market that remain.

See the report from Wall Street Journal.

The Journal is also reporting declining builder confidence despite the increase in housing starts. That may be attributed to the factors stated above as well as the declining housing prices, with the biggest decline last month not seen since late the 40’s.

From the report released by the US Census Bureau:

BUILDING PERMITS

  • Privately-owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 518,000. This is 4.0 percent (±1.7%) above the revised April rate of 498,000, but is 47.0 percent (±2.1%) below the May 2008 estimate of 978,000.
  • Single-family authorizations in May were at a rate of 408,000; this is 7.9 percent (±1.5%) above the revised April figure of 378,000. Authorizations of units in buildings with five units or more were at a rate of 92,000 in May.

HOUSING STARTS

  • Privately-owned housing starts in May were at a seasonally adjusted annual rate of 532,000. This is 17.2 percent (±14.4%) above the revised April estimate of 454,000, but is 45.2 percent (±5.8%) below the May 2008 rate of 971,000.
  • Single-family housing starts in May were at a rate of 401,000; this is 7.5 percent (±14.2%) above the revised April figure of 373,000. The May rate for units in buildings with five units or more was 124,000.

HOUSING COMPLETIONS

  • Privately-owned housing completions in May were at a seasonally adjusted annual rate of 811,000. This is 3.3 percent (±20.6%)* below the revised April estimate of 839,000 and is 28.8 percent (±11.1%) below the May 2008 rate of 1,139,000.
  • Single-family housing completions in May were at a rate of 491,000; this is 9.4 percent (±13.8%) below the revised April figure of 542,000. The May rate for units in buildings with five units or more was 314,000.

See the entire release HERE (PDF).

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