Residential
construction numbers climbed in May after their pandemic-driven collapse in April.
The Census Bureau and the Department of Housing and Urban Development report
that both permitting and starts rose during the month although completions fell.

Permits for
residential construction were authorized at a seasonally adjusted annual rate
of 1,220,000, up 14.4 percent from the previous month. The 1,074,000 permitting
rate originally reported for April was revised even lower to 1,066,000 and the rate
is now down 8.8 percent compared to a year earlier.

Analysts polled by
Econoday had expected permits to be in the 1,000,000 to 1,300,000 range.
Their consensus was 1,250,000.

Single-family
permits rose 11.9 percent
to a seasonally adjusted annual rate of 745,000 from
an adjusted rate of 666,000 (revised from 669,000) in April and are 9.9 percent
lower year-over-year. Permits for construction of multifamily units rose 18.3
percent to 434,000 units, a loss of 8.4 percent compared to a year earlier.

On a non-adjusted
basis there were 105,100 residential construction permits issued in May compared
to 96,000 in April. The single-family permitting numbers in May and April were
66,100 and 63,300, respectively.

National
Association of Home Builders economist Robert Dietz called the permit data “the
turning point for the market.”
An increase in the pace, he said, signals gains
for single-family starts ahead.

Housing starts
rose 4.3 percent from April’s revised rate of 934,000 (up from 891,000) units
to 974,000 annualized units. This still leaves the rate down 23.2 percent compared
to May 2019. Starts were at the low end of analysts predictions that ranged
from 965,000 to 1,170,000 units. The consensus published by Econoday was
1,100,000 units.

 

 

Single-family
starts were up only a slight 0.1 percent, compared to April at 675,000. The uptick
in May’s starts was muted by the addition of 24,000 more units to the original
April estimate of 650,000 starts. Single family starts still lag by 17.8
percent those of a year earlier. Multifamily starts rose 16.9 percent to
291,000 but were down 33.1 percent on an annual basis.

The number of
housing starts increased from 84,800 in April to 89,300 in May on an unadjusted
basis but were down by nearly 30,000 units from a year earlier. Single family
starts were unchanged month-over-month at 62,600.

Starts thus far in
2020 total 503,400, 0.7 percent more than a year earlier. Single-family starts
are down 2.4 percent at 339,600 while multi-family starts rose 8.0 percent to
159,000.

Units were
completed during the month were at an adjusted annual rate of 1,115,000, 791,000
of which were single-family houses representing monthly declines of 7.3 percent
and 9.8 percent. It is likely that the completion rate reflects work stoppages in
March and April. Completions were 9.3 percent and 10.8 percent lower than in
May 2019.
Multifamily completions also fell, down 2.2 percent and 8.6 percent
from the earlier periods.

At the end of the
reporting period there were an estimated 1,172,000 residential units under
construction, 503,000 of them single family houses. In addition, there was a
backlog of permits estimated at 182,000, 98,000 of which were for single family
construction.

The Northeast saw
an 82.0 percent jump in permitting, putting authorizations up 6.7 percent
year-over-year. Starts rose a more modest 12.8 percent, leaving the rate 39.1
percent lower than the prior May. The completion rate rose 11.5 percent but was
still down 31.3 percent for the year.

Permits increased
by 18.4 percent in the Midwest but remain 4.6 percent below the May 2019 rate. Starts
were down 1.5 percent and 15.8 percent from the two earlier periods.
Completions were 11.6 percent higher than the previous month’s rate but down
3.5 percent year-over-year.

Permits rose 7.7
percent in the South but lag the previous May by 7.6 percent. Starts declined 16.0
percent for the month and 32.3 percent annually and completions were off 16.5
percent and 3.2 percent, respectively.

The rate of
permitting grew 12.3 percent in the West but remains down 18.2 percent on an
annual basis. Starts surged nearly 70 percent but failed to reach May 2019
levels by 1.9 percent. The rate of completions was unchanged from April and
down 17.6 percent annually.

 

By Jann Swanson , dated 2020-06-17 10:10:49

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Courtesy of Mortgage News Daily

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