Single-family housing starts edged up 0.3% in May from the prior month, according to a new government report, as homebuilders continue to complain about labor shortages.
The Census Bureau reported Tuesday morning that single family starts rose to a 599,000 seasonally adjusted annual rate in May from a 597,000 rate in April.
The April rate was revised downward from 610,000.
Construction of residential homes hit its highest level this year at a 652,000 rate in February. But starts have slowed since then.
Overall, single family housing starts are up 16% from May 2012. In April, before the revisions, the Census Bureau estimated housing starts were up 21% from a year ago.
Despite the high national unemployment, “our members tell us they are having trouble finding skilled labor,” according to the National Association of Home Builders chief economist David Crowe.
As a result, they are working their crews harder when they would prefer to increase their hiring, he said.
Small and mid-size firms also face a shortage of building lots, which is also holding back new construction.
Despite these shortages, builder confidence about demand for new homes and sale expectations rose to the highest level since April 2006.
“Builders are experiencing some relief in the headwinds that are holding back a more robust recovery,” Crowe said.
The NAHB/Wells Fargo Housing Market Index surged 8 points from April to 52 in May. A reading above 50 means that more builders view conditions as good as opposed to bad.
NAHB chairman Rick Judson, a home builder from Charlotte, N.C, said builders are seeing more “buyers gravitating toward new homes” due to the low inventory of existing homes.
Economists at Wells Fargo Securities noted that “homebuilder confidence is reviving as more markets move into recovery mode.”