The US Departments of Housing and Urban Development, Commerce and Census Bureau all indicated that both housing starts and completions declined in May 2019.

Housing starts on a month-to-month basis fell -0.9% in May and on a year-over-year basis, housing starts decreased -4.7%. Robert Frick, an economist with the Navy Federal Credit Union, said, “Housing starts in May were below both the annualized April rate and the rate for May a year ago. House completions were also below April’s rate and the rate for May 2018.”

Single-family home starts among the single-family/townhouse/condo sector fell -6.4% from April 2018. Single-family completions fell -1.5% m/m and -2.8% y/y in May 2019. “Taken together,” said Frick, ”these numbers show that housing industry production continues to slip from last year.”

Building permits and building authorizations were the two highlights in May’s government housing reports. The number of building permits increased +0.3% compared to April and the number of single-family authorizations increased +3.7% compared to April authorizations.

Odeta Kushi, First American’s deputy chief economist, said, “The bright spot in an otherwise underwhelming report comes from the overall number of permits and authorizations, which can signal how much construction is in the pipeline. Both experienced the highest monthly rate of growth since December 2018 – indicating more construction may be on the horizon.”

Frick was less exuberant with the numbers generated by the government entities than Kushi. He said, “Given the restrictions of too little land zoned for housing, restrictive local building codes and expensive labor and materials, home builders are hard pressed to meet the growing demand for new homes…at this rate, the industry will bill fewer than the 200,000 homes needed to keep up with population growth and demand.”

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