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Housing Permits Soar Highest Since September 2008

Housing permits soared in May to their highest level since September 2008, surging 7.9 percent to 780,000, the ""Census Bureau"":http://www.census.gov/ and ""HUD"":http://portal.hud.gov/hudportal/HUD reported jointly Tuesday, but housing starts dropped 4.8 percent to 708,000, giving back all of April's gains.

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At the same time, permits for April were revised upward to 723,000 from the originally reported 715,000. April housing starts were also revised to 744,000, up from the originally reported 717,000.

Economists surveyed by Bloomberg expected increases in both areas, with 736,000 permits and 720,000 starts.

Total housing completions fell to 598,000, a 10.3 percent drop, the first decline in four months. April completions were revised up to 667,000 from the originally reported 651,000.

Multifamily (five or more units) activity accounted for most of

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the increase in permits, 40,000 of the reported 57,000 increase in May. Multifamily starts fell 57,000, more than the total 36,000 decline as single family starts increased.

Of the housing completions, builders completed 458,000 single-family homes in May, a 6.3 percent drop from the 489,000 completed in April (unchanged from the initial report), compared with the 343,000 new home sales reported for April.

Even with the month-over-month drop, total starts in May were up 28.5 percent from May 2011 and permits were up 25.0 percent from the year's earlier activity. Total completions were up 10.1 percent from last year.

The census data covered the same month for which the ""National Association of Home Builders"":http://www.nahb.com/ reported builder confidence ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô measured by the Housing Market Index ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô rose to 28 (out of 100) from 24. Any HMI reading below 50 is considered to signal a contraction. Builder confidence for June as reported Monday by NAHB.

Permits rose in three of the four Census regions, falling only in the Northeast, down to 81,000 from 88,000 in April. But permits soared to 399,000 in the South from 359,000 in April.

In the West permits jumped to 179,000 in May from 162,000 in April while in the Midwest permits rose to 121,000 from 114,000 in April.

Starts rose sharply in the West to 167,000 from 146,000 in April but fell in the three other Census regions, falling to 367,000 in May from 391,000 in April in the South, dropping to 111,000 in May from 128,000 in the Midwest and slipping to 63,000 in May from 79,000 in April in the Northeast.

About Author: Mark Lieberman

Mark Lieberman is the former Senior Economist at Fox Business Network. He is now Managing Director and Senior Economist at Economics Analytics Research. He can be heard each Friday on The Morning Briefing on POTUS on Sirius-XM Radio 124.
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