Housing Starts Relatively Flat in May

Total housing starts posted a 0.9% decrease in May (1.269 million units) compared to an upwardly revised April estimate of 1.281 million units, according to the joint data release from the Census Bureau and HUD. Relative to May 2018, total starts are 4.7% below the annual pace of 1.332 million units.

Single-family production in May posted a monthly decline, decreasing 6.4% to a seasonally adjusted annual rate of 820,000. Single-family starts in April were revised up to 876,000 units. The three-month moving average for single-family in May is 843,000 units.

On a year-to-date basis, single-family starts are 5.1% lower as of May relative to the first five months of 2018. Single-family permits, a useful indicator of future construction activity, rose 3.7% in May (815,000 units) compared to April but have registered a 5.8% loss thus far in 2019 compared to last year. This is in line with the NAHB/Wells Fargo Housing Market Index, which held builder confidence in the market for newly-built single-family homes steady at 64 in June but remains lower on a year-over-year basis.

Regional data show, on a year-to-date basis, positive conditions for single-family construction only in the South (+0.5 percent). Single-family construction is down 13.0 percent in the West, 11.9percent in the Midwest, and 6.8percent in the Northeast.

Multifamily starts (2+ unit production) posted an increase of 10.9% in May to a 449,000 annual rate compared to April. After a slow start to the year, multifamily development is moving closer to our forecast of leveling-off conditions. On a year-to-date basis, multifamily 5+ unit production is down 5.2% thus far in 2019, while multifamily 5+ unit permitting is trending higher with an increase of 2.9% relative to the first five months of 2018.

It takes 400 tons of aggregates to construct the average modern home, according to the National Stone, Sand and Gravel Association.

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