Privately owned housing starts set a post-recession high in May, reaching a seasonally adjusted annual rate of 1.35 million, a 5 percent increase from April and a 20.3 percent surge since May 2017, according to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.
Single-family housing starts had a 3.9 percent bump, rising to a rate of 936,000, while multifamily starts increased 7.5 percent to 414,000. May’s overall increases were carried by the Midwest region, which saw housing starts spike 62.2 percent compared with April. Housing starts in the South, West and Northeast regions declined 0.9, 4.1 and 15 percent, respectively.
Overall building permits declined 4.6 percent compared with April, falling to a rate of 1.3 million, with single-family permits down 2.2 percent and multifamily permits declining 8.7 percent. The overall permit rate remains 8 percent above May 2017 numbers.
National Association of Home Builders Chief Economist Robert Dietz said in a statement that though job creation and positive demographics could bolster more single-family home production in the upcoming months, increasing construction costs are taking a toll on builders.
“The softening of single-family permits is consistent with our reports showing that builders are concerned over mounting construction costs, including the highly elevated prices of softwood lumber,” Dietz said.
Related:
Builder Confidence Falls Due to Lumber Price Surge
Construction Costs Jump 8.8 Percent in May, Causing ‘Severe Squeeze’