New residential construction in the U.S. soared to their highest levels in more than a year in May, according to data from the U.S. Census Bureau.
What’s going on: Construction starts rose 21.7% from April to May, to 1,631,000 units at the annual rate from 1,340,000 units, the largest increase in these numbers in more than a year.
- Single-family homebuilding jumped 18.5% to 997,000 in May from 841,000 in April. It’s a level last seen in June 2022.
- Multifamily housing starts increased 27.1%, to a 14-month high.
Permits: New housing permits, which are a proxy for future residential building, increased 5.2% from April to May.
- Single-family permits rose 4.8%, up for the fourth consecutive month, to a 10-month high
- Multifamily permits increased 5.9% in May.
Overall: Housing starts have risen 5.7% overall since May 2022, but starts of single-family homes have dipped 6.6% year-over-year, even in the face of solid gains in the most recent data.
- On a year-over-year basis, housing permits have declined 12.7% from May 2022, with permits for single-family homes falling even more, by 13.2%.
The NAM’s take: “Issues of affordability have impacted the new housing starts negatively over the past year, but Americans have become accustomed to the ‘new normal’ in mortgage rates,” said NAM Chief Economist Chad Moutray.
- “Would-be homebuyers are coming back into the market. With little inventory, the strong growth in housing starts [was] encouraging.”