May Housing Starts 4.3 % Higher Than Projected
The U.S. Census Bureau and the U.S. Department of Housing and Urban Development released their new residential construction statistics for May 2020, which finds privately-owned housing starts in May at a seasonally-adjusted annual rate of 974,000, 4.3% above the revised April estimate of 934,000, but 23.2% below the May 2019 rate of 1,268,000.
Also in May, it was reported that single-family housing starts were at a rate of 675,000, 0.1% above the revised April figure of 674,000.
Building permits in May were at a seasonally adjusted annual rate of 1,220,000, 14.4% above the revised April rate of 1,066,000, but 8.8% below the May 2019 rate of 1,338,000. Single-family authorizations in May were at a rate of 745,000, 11.9% above the revised April figure of 666,000.
“Another sign that builders are ramping up construction of new homes is the May increase in residential construction employment, a necessary input for increasing the pace of housing starts,” noted First American Deputy Chief Economist Odeta Kushi. “The construction industry does not lend itself to automation, so more the hammers we put to work, the more homes we can expect to build.”
Housing completions in May were at a seasonally adjusted annual rate of 1,115,000, 7.3% below the revised April estimate of 1,203,000 and 9.3% below the May 2019 rate of 1,230,000.
Lawrence Yun, chief economist for the National Association of Realtors (NAR), stated: "Before the pandemic, America faced a housing shortage of around five to six million homes due to multiple years of underproduction of new homes. Now, in the middle of 2020, the housing shortage has intensified. Consequently, home prices will be pushed higher, thereby making ownership opportunities for first-time buyers more difficult. More homes need to be built.”