Housing Starts Relatively Flat Off of Strength in Multifamily SectorJune 20th, 2019 by Editor
The U.S. Housing and Urban Development and Commerce Department reports housing starts declined 0.9 percent in May to a seasonally adjusted annual rate of 1.27 million units from an upwardly revised reading in April.
The May reading reflects the number of housing units builders would begin if they kept this pace for the next 12 months. Within this overall number, single-family starts fell 6.4 percent to 820,000 units. The multifamily sector, which includes apartment buildings and condos, increased 10.9 percent to a 449,000 pace.
“The rise in single-family permits echoes the stabilization we are seeing in our builder confidence survey,” said Greg Ugalde, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Torrington, Conn. “While the increase in permits is a positive sign for the housing market, there are still affordability concerns throughout the country, especially in high-cost areas.”
Regionally, combined single-family and multifamily starts in May rose in the South (11.2 percent) but declined in the Northeast (45.5 percent), Midwest (8.0 percent) and West (2.4 percent).
Overall permits, which the NAHB says are a harbinger of future housing production, edged up 0.3 percent to a 1.3 million unit annualized rate in May. Single-family permits increased for the first time since November 2018 to 815,000, an improvement of 3.7 percent. Multifamily permits fell 5.0 percent to 479,000.
Looking at regional permit data, permits rose in the South (6.8 percent) and in the West (1.8 percent) but fell in the Northeast (24.6 percent) and in the Midwest 8.4 percent.
“The decline in single-family starts is off a solid upward revision in April,” said Danushka Nanayakkara-Skillington, NAHB assistant vice president of forecasting and analysis. “This is another indicator that ongoing builder supply-side concerns are making it more difficult to build homes at affordable price points. We expect single-family housing starts to remain flat through 2019.”