Home construction starts rose less than forecast in May
Home construction starts rose less than forecast in May, suggesting builders were slow to resume work even as states across the country began to reopen.
Residential starts rose 4.3% to a 974,000 annualized rate from a month earlier, the second-lowest level since 2015, according to a government report released Wednesday. That compared with the median forecast in a Bloomberg survey of 1.1 million. Applications to build, a proxy for future construction, climbed 14.4% to a 1.22 million rate, also less than projected.
The Commerce Department's data showed single-family starts were little changed from April. Multifamily starts, a category that tends to be volatile and includes apartment buildings and condominiums, jumped 15%, the first gain in four months.
The slight pickup in homebuilding follows one of the worst months for the industry in years, indicating a construction rebound may take time to unfold. Construction sites across the nation were impacted by COVID-19, and widespread job losses weighed on housing demand.
Total starts were down 23.2% from May 2019. Starts dropped from a month earlier in two of four regions, including a 16% decline in the South to the lowest level since November 2014. New construction also fell 1.5% in the Midwest.
Other figures show the housing market is picking up steam. A weekly measure of mortgage applications for home purchases has increased for nine straight weeks and is at an 11-year high. A report Tuesday showed a gauge of builder sentiment rose by a record 21 points in June. At the same time, extended time at home has likely spurred some buyers to consider homeownership as historically low mortgage rates lured others.
The report showed a pickup in the number of residential projects authorized but not yet started, indicating ground breaking may firm up in coming months. The number of single-family homes authorized and awaiting construction rose to 98,000 in May, the highest since December 2018.