Housing starts fall in May, permits up sharply

WASHINGTON, Tue Jun 19, 2012 – Housing starts fell in May although permits to build new homes rose to the highest in well over three years, sending mixed signals about the health of the housing market.

The Commerce Department said on Tuesday that groundbreaking on new homes dropped 4.8 percent to a seasonally adjusted annual rate of 708,000 units.

The reading, which is prone to significant revisions, was below the median forecast in a Reuters poll of a 720,000-unit rate.

Revisions to data from prior months were more upbeat. April’s starts were revised up to a 744,000-unit pace from a previously reported 717,000 unit rate. That was the highest reading since October 2008.

New permits for building homes jumped 7.9 percent to a 780,000-unit pace. That was the highest since September 2008 and well above analysts’ forecasts.

The housing market has shown some signs of life after collapsing six years ago, but remains hobbled by a glut of unsold homes.

Groundbreaking for single-family homes increased 3.2 percent. This segment accounts for most of the market. Starts for multi-family homes, which is one of the Commerce Department report’s more volatile readings, fell 21.3 percent.

Sentiment among home builders touched a five-year high in June, a survey showed on Monday.

Housing starts rebound in April, permits fall however

WASHINGTON, Wed May 16, 2012 – Housing starts rose more than expected in April, according to a government report on Wednesday that offered signs of a nascent housing recovery, even though permits for future building fell after touching a 3½ -year high the prior month.

The Commerce Department said housing starts increased 2.6 percent to a seasonally adjusted annual rate of 717,000 units. March’s starts were revised up to a 699,000-unit pace from a previously reported 654,000 unit rate.

Economists polled by Reuters had forecast housing starts rising to 680,000-unit rate. Compared to April last year, residential construction was up 29.9 percent.

The housing market is showing some signs of life after collapsing six years ago, but remains hobbled by a glut of unsold homes.

However, rising demand for rentals, which has seen builders breaking more ground on apartment projects, is helping to stabilize the market.

Housing starts last month rose across the board. Groundbreaking for single-family homes increased 2.3 percent. This segment accounts for most of the market. Starts for multi-family homes advanced 3.2 percent.

Despite last month’s overall jump in starts, they remain less than a third of their peak in January 2006. Residential construction in the first quarter grew at the fastest pace in nearly two years and is expected to contribute to economic growth this year for the first time since 2005.

Housing starts fall less than expected in July

WASHINGTON ― Housing starts fell less than expected in July as builders broke ground on new multifamily units likely to meet demand for rental apartments, while permits for future construction dropped.

The Commerce Department said Tuesday housing starts slipped 1.5 percent to a seasonally adjusted annual rate of 604,000 units, but above economists expectations for a 600,000-unit pace.

The report painted a picture of a housing market that continues to bounce along the bottom, swamped by an oversupply of unsold homes. Compared to July last year, residential construction was up 9.8 percent.

“The market is continuing to adjust to a reduction in the national home ownership rate at the same time the supply of existing single-family homes remain excessive,” said Peter Boockvar, equity strategist at Miller Tabak & Co. in New York.

U.S. financial markets were little moved by the report as investors focused on weak euro zone growth data, which heightened fears the global economy might be slowing down much faster then previously thought.

U.S. data so far for the third quarter have painted a mixed picture of the economy which barely grew in the first half of the year. While there has been a moderation in the pace of layoffs in July and early August, the slowdown in manufacturing appears to be deepening.

A bloated inventory of unsold homes and a weak economy are weighing down on the housing market, whose collapse was the main catalyst of the 2007-09 recession. A large foreclosure pipeline also is not helping, leaving builders with little incentive to break ground on new projects.Sentiment among home builders was steady at low levels in August, a survey showed on Monday, but they were pessimistic about sales over the next six months.

But demand for rentals, as Americans shun homeownership because of plummeting home prices and a 9.1 percent jobless rate, is stemming further declines in home construction.

Last month, housing starts for multi-family homes rose 7.8 percent to a 179,000-unit rate, and groundbreaking for projects with five or more units was the highest since January.

Single-family home construction ― which accounts for a large portion of the market ― dropped 4.9 percent to a 425,000-unit pace.

New building permits fell 3.2 percent to a 597,000-unit pace last month. Economists had expected overall building permits in July to fall to a 605,000-unit pace.

Permits were dragged down by a 10.2 percent drop in the multi-family segment. Permits to build single-family homes rose 0.5 percent.

New home completions increased 11.8 percent to 636,000 units in July, the highest since June 2010.