Building permits at 4-year high, single-family housing starts up
Builders broke ground on fewer homes in May, due mostly to plummeting apartment construction, but requested the most permits since September 2008.
Overall housing starts last month dropped 4.8% to a seasonally adjusted annual rate of 708,000, but that’s compared with April’s 744,000 figure, which was revised up.
Compared with May 2011, new construction is up 28.5%, according to the Commerce Department report.
Initial work on multi-family housing, an erratic gauge which plunged 21.3% last month, was a drag on the overall measure. Housing starts for single-family homes rose 3.2% in their third straight monthly increase.
Builders also seem to be looking forward to the next 12 months, requesting the most permits in more than three years.
Permits were at a seasonally adjusted rate of 780,000, a 7.9% increase from April and 25% above last May.
The new data raises the question du jour: Is the housing market making a gradual recovery?
Both the housing starts and building permits measures are at about half the 1.5-million level usually considered healthy. A report Monday found home-builder confidence still weak, despite being at a five-year high.
But home prices, while low, seem to be turning around. Record-low mortgage rates may be attracting more buyers, causing home sales to surge in California. Inventories seem to be shrinking, according to some studies.