Housing starts in the U.S. fell 0.3% to an annual rate of 1.164 million in May, beating the median forecast. However, building permits, which are a sign of future activity, rose 0.7% to 1.164 million. The estimate was for 1.150 million.
“Despite May’s relatively flat report, our builders are telling us that the market is improving and consumers are more ready and willing to make a home purchase,” said NAHB Chairman Ed Brady, a home builder and developer from Bloomington, Ill.
Single-family housing starts actually increased slightly by 0.3% to a seasonally adjusted annual rate of 764,000 units, but multi-family housing starts declined 1.2% to 400,000 units.
“Builder confidence rose this month and single-family housing starts are up roughly 10 percent from a year ago — two indicators that we can expect further growth in housing production this year,” said NAHB Chief Economist Robert Dietz. “However, builders continue to face supply-side constraints, such as shortages of buildable lots and labor.”
Regionally, building permits increased 15.3% in the West, but the South, Northeast and Midwest posted respective losses of 1.4%, 7.8% and 9.2%. Most building construction in the housing market occurs in the South.