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Bloomberg
New-home construction in the U.S. was little changed in May, a sign the residential real-estate industry will add little to economic growth in the second quarter.
Housing starts in May fell 0.3 percent to a 1.16 million annualized rate from a 1.17 million pace the prior month, a Commerce Department report showed in Washington.
Progress in residential real estate may be idling alongside other parts of the economy as builders wait to see if momentum re-accelerates before breaking ground on new projects. Borrowing costs that remain attractive may help lure prospective home-buyers into the market, though stronger wage growth will be needed to enable first-timers to take the plunge.
“All along we expected this would be a pretty gradual recovery and that’s largely coming true,†said Scott Brown, chief economist at Raymond James Financial Inc. in St. Petersburg, Florida, whose forecast for housing starts was among the closest in the Bloomberg survey. “We’re still very far from a boom period in housing at all here, but I think the fundamentals are still pretty good.â€
Survey Results
Estimates for housing starts in the Bloomberg survey ranged from 1.07 million to 1.2 million. The April figure was revised slightly down, leaving the rounded reading at 1.17 million.
Building permits climbed 0.7 percent in May to a 1.14 million annualized rate. Since applications trail last month’s starts, it indicates there is little scope for additional gains in construction in the next month or two. They were projected to rise to 1.15 million.
Construction of single-family houses increased 0.3 percent to an 764,000 rate, the most in three months, the report showed.
Work on multifamily homes, such as apartment buildings fell 1.2 percent to a 400,000 rate.