Housing Shortage Ahead?

Construction down for third straight month

Roger Davis
June 18, 2017 - 9:49 pm

May housing starts came in at 1,092,000, well below consensus estimates of 1.21 million and down 2.4% year over year. We have been optimistic about the market’s slow and steady recovery based upon consistent year-over-year improvement, so we will need to watch carefully if this is a one-time anomaly or a multi-month trend. The industry is already facing an inventory shortage, which is driving up prices, so these results indicate the demand-supply gap could get worse and further impact affordability for certain segments and markets.

Single family starts, one of our primary indicators of the health of the market, dropped below 800,000 for the first time since September of last year, to 794,000. This is down 3.9% from last month but up 8.5% year-over-year.  The volatile multi-family number dropped 26% from last year, to 284,000.

Permits, a leading indicator of future housing activity, showed a year​-over​-year decrease, dropping 0.8% to 1,168,000. This may indicate some short-term pressure on the monthly housing starts number for the remainder of the summer. 

From the Commerce Department

FOR RELEASE AT 8:30 AM EDT, FRIDAY, JUNE 16, 2017 MONTHLY NEW RESIDENTIAL CONSTRUCTION, MAY 2017 Release Number: CB17-98
June 16, 2017 - The U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly announced the following new residential construction statistics for May 2017: 
 
NEW RESIDENTIAL CONSTRUCTION MAY 2017 
 Building Permits: 1,168,000   Housing Starts: 1,092,000   Housing Completions: 1,164,000  Next Release:  July 19, 2017
 
 
Seasonally Adjusted Annual Rate Source:  U.S. Census Bureau, HUD, June 16, 2017
 
 
Building Permits Privately-owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 1,168,000.  This is 4.9 percent (±0.9 percent) below the revised April rate of 1,228,000 and is 0.8 percent (±1.1 percent)* below the May 2016 rate of 1,178,000.  Single-family authorizations in May were at a rate of 779,000; this is 1.9 percent (±1.0 percent) below the revised April figure of 794,000.  Authorizations of units in buildings with five units or more were at a rate of 358,000 in May. Housing Starts Privately-owned housing starts in May were at a seasonally adjusted annual rate of 1,092,000.  This is 5.5 percent (±11.9 percent)* below the revised April estimate of 1,156,000 and is 2.4 percent (±11.4 percent)* below the May 2016 rate of 1,119,000.  Single-family housing starts in May were at a rate of 794,000; this is 3.9 percent (±10.4 percent)* below the revised April figure of 826,000.

 

 

 

 

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