Residential construction figures had been expected to, at a minimum, hold the fort in May after a mixed report in April. While revisions to the April report somewhat skewed the numbers changes to both permits and starts were only fractional.
The Census Bureau and the Department of Housing and Urban Development said permits for privately owned housing units were issued at a seasonally adjusted annual rate of 1,294,000 units, an increase of 0.3 percent from April's revised (from 1,296,000) rate of 1,290,000. The May estimate is 0.5 percent below the permitting rate in May of last year, estimated at a rate of 1,301,000 units.
Analysts were about on target with their projections. Those polled by Econoday had forecast permits at a rate of 1,290,000 units within a range of 1,270,000 to 1,309,000.
Single-family permits performed better than they have in recent months, rising by 3.7 percent to an annual rate of 815,000. In April the rate was 786,000 units, revised from 782,000. May permits were 3.3 percent lower than the rate in May 2018. Permits for construction in buildings with five or more units fell by 3.7 percent to 442,000 but were up 4.2 percent from a year earlier.
On an unadjusted basis, there were 124,000 permits issued in May, 81,200 of them for single-family houses. The respective numbers in April were 118,700 and 75,700 units.
Permits issued during the first five months of 2019 total 535,000. This is down 3.0 percent from the same period in 2018. Single-family permits total 342,400 compared to 363,300 last year, a decline of 5.8 percent. Multifamily permits for the year-to-date (YTD) are running 2.9 percent ahead of 2019 at 176,800 units.
Residential construction starts dipped by 0.9 percent compared to April and 4.7 percent year-over-year to a rate of 1,269,000. The decline was mitigated a bit by the upward revision of April starts from 1,235,000 to 1,281,000 units. April had already been an unexpectedly good month with a 5.7 percent month-over-month gain. Despite this, starts are still lagging those from a year earlier by 4.7 percent.
Despite declining, starts were still well above analysts' expectations which ranged from 1,205,000 to 1,250,000. The consensus was 1,239,00.
The single-family sector continues to disappoint. Starts declined by 6.4 percent from the revised April level of 876,000 (originally 854,000) to 820,000 units and by 12,5 percent compared to May 2018. Multifamily starts increased by 13.8 percent to 436,000, putting them ahead of the rate a year earlier by exactly the same percentage.
On an unadjusted basis, there were 118,700 residential units started in May compared to 117,900 in April. Single-family starts were down to 78,300 units from 83,100 the previous month.
YTD starts total 501,900 compared to 529,700 through the first five months of last year. Single-family starts are down 5.1 percent to 350,000 and those for multifamily units are behind the prior year by 5.2 percent at 146,900 units.
While it is a lagging indicator and largely ignored by analysts and the media, the worst news was about completions. They dropped by 9.5 percent to a rate of 1,213,000 units from an upwardly revised (from 1,312,000) 1,340,000 units in April. This is 2.8 percent lower than completions in May 2018. Single-family completions dipped 5.0 percent to 890,000 units but maintained a 1.6 percent lead over the May 2018 number. Multifamily completions, at 319,000 annual units, were down 18.2 percent and 11.4 percent from earlier numbers.
There were an estimated 1,131,000 units of construction underway at the end of May, unchanged from April. There were lower than the prior month in every region but the South. Single-family construction was in process on 523,000 single-family units. In addition, there was a backlog of 177,000 permits under which construction had not yet begun, 84,000 of them for single-family residences.
Permitting in the Northeast fell 24.6 percent from April and were 31.3 percent lower than the previous May. Starts dropped even further, diving 45.5 percent compared to April and 32.4 percent on an annual basis. Completions did manage a 6.5 percent year-over-year gain but were down 21.0 percent for the month.
In the Midwest, permits declined by 8.4 percent for the month and were 16.7 percent lower on an annual basis. Starts lost 8.0 percent and 33.1 percent from the two earlier periods. The rate of completions was unchanged from April and 11.2 percent higher than the previous May.
There were 6.8 percent more permits issued in the South than in April and 10.9 percent more than the prior May. There was an increase in starts of 11.2 percent and they were 8.1 percent higher than a year earlier. Completions declined 10.8 percent and 10.6 percent respectively.
Permits rose 1.8 percent in the West and were 0.6 percent higher year-over-year. Housing starts dipped 2.4 percent from April and were running 0.6 percent behind on an annual basis. Completions were off 8.1 percent from April but 3.5 percent higher than the prior May.
