Dive Brief:
- Housing starts slipped 0.3% in May to a 1.164 million annualized rate, down slightly from the revised 1.167 million rate in April, the Commerce Department reported Friday. May housing starts were 9.5% above the May 2015 mark.
- New applications for building permits, which predict future construction activity, rose 0.7% in May but were 10.1% below May 2015.
- Multifamily construction slipped 1.2% last month, while single-family rose a slight 0.3%, according to Reuters.
Dive Insight:
May housing starts topped expectations, as economists surveyed by Reuters predicted starts would fall to 1.15 million. Reuters noted that despite the slight slide in new residential construction, the bump in building permits signals that the market will continue to gain momentum and "support economic growth in the second quarter."
Housing starts saw a strong surge in April, followed by May's plateau. However, the positive gains in single-family construction add more fuel to economist predictions that single-family will outpace multifamily this year.
The report comes one day after the NAHB/Wells Fargo Housing Market Index reported a two-point rise, breaking a four-month streak of a stagnant score. NAHB Chief Economist Robert Dietz said the high score — along with growing home sales and a strengthening economy — indicated "that the housing market should continue to move forward in the second half of 2016."
Today's report will be followed by the existing home sales report Wednesday, new home sales Thursday, and pending home sales June 29.
