Housing starts, permits surge in N.E.<br> in May but decline nationwide

WASHINGTON – New housing starts and new permits for future construction both soared last month in the Northeast, erasing April’s declines, according to the joint report issued today by the U.S. Census Bureau and U.S. Department of Housing and Urban Development. But nationwide, housing starts and authorizations both fell in May after rising the month before.
U.S. builders broke ground on new dwellings in May at a seasonally adjusted rate of 975,000 units per year, the Census Bureau said. That represented a decline of 3.3 percent from April’s revised rate of 1.008 million per year and 32.1 percent from the revised May 2007 estimate of 1.436 million units per year.
Analysts had expected housing starts would fall to an annual pace of 980,000 – from the original April estimate of 1.032 million per year (READ MORE)– based on the median forecast from a Bloomberg News survey of economists.
Single-family housing starts continued to decline, falling 1.0 percent from their April level to a May pace of 647,000 units per year that was 41.2 percent below the year-ago level. Multi-family starts fell in May after surging the month before, with new construction of structures with five or more units dropping 10.5 percent compared with April to 280,000 units per year, although it remained 9.4 percent above the year-ago level.
In the Northeast, new residential construction soared last month to an annual pace of 147,000 units per year, an increase of 61.5 percent compared with April, although they remained 10.9 percent below the region’s May 2007 level. Housing starts fell compared with April in Midwest (-25 percent), the West (-10.3 percent) and the South (-4.4 percent), and lagged year-ago levels in every region.
Nationwide, however, “the downtrend is still in place,” Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York, told Bloomberg News. “Inventories are still very high, prices are still coming down. None of that argues for a turnaround yet.”
Housing permits – an indicator of future construction – were issued last month at a seasonally adjusted rate of 978,000 units per year, a decline of 1.3 percent from the previous month’s revised rate of 982,000 per year and 36.3 percent from the revised May 2007 estimate of 1.522 million.
Single-family authorizations nationwide fell 4.0 percent compared with April, to a May rate of 623,000 units per year, but remained 41.4 percent below their level a year ago. Authorizations for large multi-family structures continued to rise, however, with permits for buildings with five or more units increasing 6.4 percent over the month to 314,000 units per year, although they remained 20.5 percent below their May 2007 level.
In the Northeast, total housing permits surged 30.6 percent in May – after falling 2.7 percent in April and rising 5.7 percent in March – to a 141,000-unit-per-year pace that was 4.7 percent below the May 2007 level. Housing authorizations also rose last month in the West (+4.1 percent) but fell in the South (-8.6 percent) and the Midwest (-7.6 percent). Permits lagged year-ago levels in every region.
Additional information, including the full New Residential Construction Report from the U.S. Commerce Department’s Census Bureau and the U.S. Department of Housing and Urban Development, is available at www.census.gov.