May Residential Construction News Mixed

Residential construction data released this morning showed both housing starts and permits holding fairly steady in May compared to April, but while starts were running well above last year, permits were down substantially.  The Census Bureau and the Department of Housing and Urban Development said the year-over-year decline in permits issued was 10.1 percent.

Permits were issued in May at a seasonally adjusted annual rate of 1,138,000, up 0.7 percent from the upwardly revised (from 1,116,000) April rate of 1,130,000.  Permits had been issued a year earlier at an annual rate of 1,266,000. Analysts surveyed by Econoday were expecting permitting to be at an annual rate of 1,140,000 units.

Single-family permits were issued at a rate of 726,000, down 2.0 percent from the April figure of 741,000.  That number was revised from an original report of 736,000 units.  The May figure was an increase of 4.8 percent from 693,000 a year earlier.  Permits for construction of multi-family units rose 6.7 percent from the previous month but were off 29.3 percent from the pace the previous May.

On a non-seasonally adjusted basis there were 107,800 permits issued in May compared to 99,700 the previous month and 119,900 in May 2016. 

Construction was begun on residential units at a seasonally adjusted annual rate of 1,164,000 in May, down 0.3 percent from April's revised estimate of 1,167,000.  The April estimate was revised down from 1,172,000 units.  On an annual basis starts rose 9.5 percent from 1,063,000. The consensus from analysts was for 1,150,000 housing starts.

Single family starts rose 0.3 percent to 764,000 units in May from 762,000 in April (revised from 778,000 units) and were 10.1 percent higher than a year earlier.  Multi-family housing starts were at a rate of 396,000, a monthly increase of 1.3 percent and up 10.0 percent on an annual basis.

On a non-adjusted basis there were 109,200 residential units on which construction was started in May compared to 107,300 in April and 99,600 a year earlier.

Housing units were completed at a seasonally adjusted annual rate of 988,000, a 5.1 percent increase from April's revised (from 933,000) estimate of 940,000 units.  This was down 3.5 percent from completions in May 2015.

Single family completions were up 2.3 percent to 717,000 from 701,000.  Multi-family units were completed at a rate of 263,000 units, up 14.1 percent for the month.

On a non-adjusted basis there were 81,100 units of housing completed during the period compared to 73,200 the previous month.

At the end of the reporting period there were an estimated 1,027,700 units (not seasonally adjusted) of housing under construction nationwide.  An estimated 437,400 of these units were single-family.  There were 143,100 permits for construction that had been authorized but under which construction had not yet begun.

Permits were issued in the Northeast at a rate 7.8 percent below that of April and down 67.1 percent from the previous May. Housing starts plummeted by 33.3 percent and 42.7 percent for the two periods. Completions were also down, 25.3 percent on a monthly basis and 57.8 percent from a year earlier.

In the Midwest permitting fell by 9.2 percent but remained up 1.1 percent on an annual basis. Housing starts dipped by 2.5 percent but were running 37.2 percent ahead of May 2015.  Completions were up 21.2 percent from April and 1.2 percent from the previous May

The South saw a decrease of 1.4 percent in permitting from April to May but a year-over-year gain of 2.0 percent.  Housing starts increased by 1.5 percent from April and 20.7 percent from May 2015. Completions rose 5.6 percent from the month and 8.2 percent for the year.

Permitting was strong in the West, up 15.3 percent for the month and 20.2 percent for the year.  Starts rose by 14.4 percent from April and were 1.1 percent higher than a year earlier. Completions rose 5.5 percent and 3.1 percent respectively.