The U.S Census Bureau’s Residential Housing Report for May 2019 revealed there has been very little change in housing starts over the past month, with single-family housing experiencing both ups and downs.
The report found that May saw 1.27 million housing starts, which is just a 0.9% decline from April’s estimate 1.28 million. Single-family housing starts in May, though, were 820,000, which is 6.4% below the revised April estimate of 820,000.
Building permits for single-family homes increased 3.7% month-over-month to 815,000 from April’s 786,000.
The Census’ report found there were 1.21 million housing completions in May, which is 9.5% decrease from April, and a year-over-year drop of 2.8%. Completions of single-family housing is estimated to be 890,000, and is a 5% decline from last month’s 937,000.
“This month’s overall pace of housing starts, 1.27 million units, sends a mixed message for the housing market – fewer new homes coming to the market in the short term, but some hope of more housing supply in the not too distant future,” said First American’s Deputy Chief Economist Odeta Kushi. “U.S. homebuilding fell in May, with housing starts declining 4.7% compared with one year ago. The decline will be discouraging for home buyers as it signals less supply for a housing market in need of a supply surge.”
Kushi said the “bright spot in an otherwise underwhelming report” is the number of permits issued, which can signal further growth.
“Building permits experienced the highest monthly rate of growth since December – indicating more construction may be on the horizon,” Kushi said. “The overall number of permits edged up 0.3% compared to April, suggesting the housing market may be benefitting from the continued decline in mortgage rates.”
Additional construction in the near future might be an issue, as the National Association of Home Builders (NAHB) reported earlier this month that the number of vacant jobs in the construction sector increased to 404,000—a post-Great Recession high.
The NAHB stated this represents a year-over-year increase of more than 258,000 job openings since April 2018.