New Housing Numbers Show Signs of Continued GrowthJune 18th, 2020 by Emmariah Holcomb
In a sign that the housing market continues to show forward momentum, single-family permits posted an 11.9% gain in May, while total housing starts increased 4.3% to a seasonally adjusted annual rate of 974,000 units, according to a report from the U.S. Housing and Urban Development and Commerce Department.
The May reading of 974,000 starts is 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 increased 0.1% to a 675,000 seasonally adjusted annual rate, after an upward revision for the April estimate. The multifamily sector, which includes apartment buildings and condos, increased 15% to a 299,000 pace, according to the report.
“We are seeing many positive economic indicators that point to a recovery, including low interest rates, rising demand and an increase in mortgage applications,” said Dean Mon, National Association of Home Builders (NAHB) chairman. “Single-family and multifamily housing production are on an upward path while overall permits, which are a harbinger of future building activity, posted a double-digit gain.”
On a regional and year-to-date basis (January through May of 2020 compared to that same timeframe the previous year), combined single-family and multifamily starts are 1.7% higher in the Midwest, 4.7% higher in the West, 6.7% lower in the Northeast and 0.2% lower in the South.
“The May housing report is consistent with the positive results of the NAHB/Wells Fargo builder sentiment index, and we expect this momentum to continue as economic activity recovers,” said Robert Dietz, NAHB chief economist. “In another promising sign, single-family permits are up almost 2% on a year-to-date basis and builders are bringing back thousands of workers laid off in March and April to meet renewed demand.”
Overall permits increased 14.4% to a 1.22 million unit annualized rate in May. Single-family permits increased 11.9% to a 745,000 unit rate. Multifamily permits increased 18.8% to a 475,000 pace.
Looking at regional permit data on a year-to-date basis, permits are 14.8% lower in the Northeast, 6.2% lower in the Midwest, 2.7% lower in the West and 0.8% higher in the South.