New Housing Starts Follows Apartment Construction Higher

The seasonally adjusted rate of new building permits fell to 974,000, which is 3.1% below the upwardly revised April rate of 1.05 million and 20.8% higher than the May 2012 rate of 806,000,000. The consensus estimate called for 973,000 new permits.

Single-family housing starts rose slightly to an annualized rate of 599,000 in May, up 0.3% from the downwardly revised April rate of 597,000.

Permits for new single-family homes rose 1.3% in May, to an adjusted annual rate of 614,000, from a downwardly revised total of 614,000 in April.

The rise in new housing starts is due virtually entirely to a sharp jump in buildings with five or more units. In April, multiple unit construction fell from 356,000 starts in March to 245,000. The May count rose to 306,000, a jump of 24.9%. Year over year, construction starts on multiple family buildings are up 69.1%.

The National Association of Homebuilders (NAHB) yesterday reported an eight point rise in builder confidence in June, noting that low inventory levels are encouraging builders once again to ramp up construction.