Housing Starts Decreased in May,
But Building Permits Swung Higher
By JEFF BATER
June 19, 2007
WASHINGTON -- Housing starts fell for the first time in four months during May, but building permits swung up, a promising sign for future construction.
Starts decreased 2.1% to a seasonally adjusted 1.474 million annual rate, after rising by 1.0% in April to 1.506 million, the Commerce Department said Tuesday. Originally, April starts were seen increasing by 2.5% to 1.528 million.
The median estimate of 25 economists surveyed by Dow Jones Newswires was a 3.5% drop to a 1.474 million annual rate. The decline was the first since starts plunged 14% in January. Starts, year-to-year, were 24% lower than the level in May 2006.
U.S. homebuilders aren't sanguine, according to their trade group. The National Association of Home Builders' latest index gauging builder confidence fell to the lowest point since 1991. The NAHB's index for sales of new, single-family homes dropped to 28 in June from 30 in May.
"Housing's woes seem far from over," commented Goldman Sachs in a research note about the NAHB report, released Monday.
The housing group's yardstick is based on a survey of builders asked about sales prospects. The subprime loan market and rising mortgage rates are worrying builders.
"Home sales most likely will erode somewhat further in the months ahead, and improvements in housing starts probably will not be recorded until early next year," NAHB chief economist David Seiders said.
And yet a sign of future activity, building permits, rose last month more than expected, Tuesday's starts data showed. Permits were up by 3.0% to a 1.501 million annual rate, the Commerce Department report said. Economists expected a 0.2% climb to 1.460 million. Permits decreased a revised 7.1% in April to 1.457 million; originally, permits were seen down 8.9% to 1.429 million.
May single-family housing starts decreased 3.4% to 1.170 million. Construction of housing with two or more units rose 3.1% to 304,000; within that category, groundbreakings of homes with five or more units -- or multifamily -- were 3.8% higher.
Regionally, housing starts increased by 16% in the Northeast and 16% in the Midwest. Construction decreased by 20% in the West and 1.6% in the South.
Nationwide, an estimated 139,200 houses were actually started in May, based on unseasonally adjusted figures. An estimated 142,300 building permits were issued last month, also based on unadjusted figures.
But Building Permits Swung Higher
By JEFF BATER
June 19, 2007
WASHINGTON -- Housing starts fell for the first time in four months during May, but building permits swung up, a promising sign for future construction.
Starts decreased 2.1% to a seasonally adjusted 1.474 million annual rate, after rising by 1.0% in April to 1.506 million, the Commerce Department said Tuesday. Originally, April starts were seen increasing by 2.5% to 1.528 million.
The median estimate of 25 economists surveyed by Dow Jones Newswires was a 3.5% drop to a 1.474 million annual rate. The decline was the first since starts plunged 14% in January. Starts, year-to-year, were 24% lower than the level in May 2006.
U.S. homebuilders aren't sanguine, according to their trade group. The National Association of Home Builders' latest index gauging builder confidence fell to the lowest point since 1991. The NAHB's index for sales of new, single-family homes dropped to 28 in June from 30 in May.
"Housing's woes seem far from over," commented Goldman Sachs in a research note about the NAHB report, released Monday.
The housing group's yardstick is based on a survey of builders asked about sales prospects. The subprime loan market and rising mortgage rates are worrying builders.
"Home sales most likely will erode somewhat further in the months ahead, and improvements in housing starts probably will not be recorded until early next year," NAHB chief economist David Seiders said.
And yet a sign of future activity, building permits, rose last month more than expected, Tuesday's starts data showed. Permits were up by 3.0% to a 1.501 million annual rate, the Commerce Department report said. Economists expected a 0.2% climb to 1.460 million. Permits decreased a revised 7.1% in April to 1.457 million; originally, permits were seen down 8.9% to 1.429 million.
May single-family housing starts decreased 3.4% to 1.170 million. Construction of housing with two or more units rose 3.1% to 304,000; within that category, groundbreakings of homes with five or more units -- or multifamily -- were 3.8% higher.
Regionally, housing starts increased by 16% in the Northeast and 16% in the Midwest. Construction decreased by 20% in the West and 1.6% in the South.
Nationwide, an estimated 139,200 houses were actually started in May, based on unseasonally adjusted figures. An estimated 142,300 building permits were issued last month, also based on unadjusted figures.
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