Overall housing starts increased 3.6 percent in May to a seasonally adjusted annual rate of 1.57 million units off of a downwardly revised April reading, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
The May reading of 1.57 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months. Within this overall number, single-family starts increased 4.2 percent to a 1.10 million seasonally adjusted annual rate. The multifamily sector increased 2.4 percent to a 474,000 pace.
"Single-family starts held firm in May as demand remains strong despite recent gains in new home costs," says Chuck Fowke, chairman of the National Association of Home Builders. "However, single-family permits posted a decline as higher construction costs are deterring some residential construction activity. Policymakers need to help the industry's supply-chains in order to protect housing affordability."
"Single-family permits declined to the lowest pace since September 2020 as the home building market cools somewhat to adjust to higher prices and longer delivery times of building materials," says Robert Dietz, NAHB chief economist. "The count of single-family homes permitted but not started construction is up 53 percent over the last year due to both gains for home construction since the onset of the 2020 virus crisis and the delay of some building projects due to higher costs for materials and labor."
Overall permits decreased 3 percent to a 1.68 million unit annualized rate in May. Single-family permits decreased 1.6 percent to a 1.13 million unit rate. Multifamily permits decreased 5.8 percent to a 551,000 pace.
The number of single-family homes permitted but not started construction continued to increase in May, rising to 142,000 units, which is 52.7 percent higher than a year ago.
Meanwhile, the number of single-family homes under construction is up 27.8 percent year-over-year, having increased to 652,000 homes. The number of apartments currently under construction is relatively flat at 672,000 units.
