U.S. Housing Starts Unexpectedly Fall in May; Building Permits Decline
by:Tom Moeller
|in:Economy in Brief
Summary
- Single-family & multi-family starts weaken.
- Starts fall throughout the country, except the West.
- Building permits decline to four-year low.
Total housing starts declined 5.5% (-19.3% y/y) during May to 1.277 million (SAAR) from 1.352 million in April, revised from 1.360 million. Starts in March declined 16.0% to 1.299 million, revised from 1.287 million. Starts were at the lowest level since June 2020 and were 30.1% below the most recent peak of 1.828 million in April 2022. The Action Economics Forecast Survey expected 1.382 million starts in May.
Housing starts by type both weakened last month. Starts of single-family units fell 5.2% (-1.7% y/y) to 982,000 after easing 0.5% in April to 1.036 million, revised from 1.031 million. They reached a high of 1.286 units in December 2020. Multi-family starts fell 6.6% (-49.5% y/y) in May to 295,000 after rising 22.5% to 316,000 in April, revised from 329,000. They reached a high of 624,000 units in November 2022.
Starts declined last month in most regions of the country. In the Northeast, the level of starts fell 2.5% (-19.8% y/y) to 77,000 units after declining 17.7% in April. Starts in the Midwest declined 19.0% (-43.1% y/y) to 149,000 following a 19.5% April rise. Starts in the South weakened 8.5% (16.1% y/y) to 733,000 and reversed a 9.4% April increase. Moving higher, starts in the West rose 10.4% (-9.4% y/y) to 318,000 after falling in each of the prior four months.
Building permits declined 3.8% (-9.5% y/y) to 1.386 million after falling an unrevised 3.0% in April. Permits have declined in each month of this year and were at the lowest level since June 2020. Single-family permits weakened 2.9% (+3.4% y/y) to 949,000 in May following a 0.7% April easing and a 4.2% March fall. Multi-family permits were off 5.6% (-28.8% y/y) to 437,000, after falling 7.6% in April.
The housing starts and permits figures can be found in Haver's USECON database. The expectations figure is contained in the AS1REPNA database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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