US housing starts pause after hefty gains, building permits soar
[WASHINGTON] US housing starts fell in May after a hefty increase the prior month, but a surge in permits for future construction to a near eight-year high suggested the pullback was temporary and pointed to underlying strength in housing.
Groundbreaking dropped 11.1 per cent to a seasonally adjusted annual pace of 1.04 mullion units, the Commerce Department said on Tuesday. That partially reversed April's large gain. April starts were revised up to a 1.17 million-unit rate, the highest since November 2007.
Economists polled by Reuters had forecast housing starts falling to a 1.10 million-unit pace last month after a previously reported 1.14 million-unit rate.
Permits for future home construction increased 11.8 per cent to a 1.28 million-unit rate, the highest since August 2007. Permits have been above a 1 million-unit pace since July.
Home building has regained ground lost during a harsh winter and there are signs activity will accelerate this year as tightening labor market conditions spur strong wage gains and encourage young adults to move from their parents' basements.
A survey on Monday showed confidence among builders vaulting to a nine-month high in June, with measures of current sales and buyer traffic increasing solidly.
Economists anticipate that the housing market strength will take up some of the slack of the struggling manufacturing sector and support economic growth this year.
Groundbreaking for single-family homes, which account for the largest share of the market, fell 5.4 per cent to a 680,000 unit pace. Starts for the volatile multifamily segment tumbled 20.2 per cent to a 356,000 unit rate.
Groundbreaking fell in all four regions, declining a steep 26.5 per cent in the Northeast after April's spectacular gains. Starts in the South, where most of the home building takes place, fell 5.0 per cent.
Single-family building permits increased 2.6 per cent to their highest level since December. Multi-family building permits soared 24.9 per cent.
Permits for buildings with five units or more increased to their highest level since January 1990.
REUTERS
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Property
Homebuyers shun new real estate in Vancouver, hurting builders
US pending home sales jump in March to hit highest in the year
Blackstone strikes US$1.6 billion student housing deal with KKR
European real estate deals slump to lowest level in 13 years
Singapore Q1 industrial rents rise further as occupancy dips and prices fall: JTC
Condo resale volumes rebound in March; prices inch up 0.4%: SRX, 99.co