Steel Markets

NAHB: Housing Production on Upward Path

June 17, 2020

Housing starts rose 4.3 percent in May to a seasonally adjusted annual rate of 974,000. Starts were 23.2 percent below the May 2019 rate of 1.27 million. Single-family starts were flat, increasing just 0.1 percent last month. Construction of housing with five units or more, however, jumped 16.9 percent.

Regionally and on a year-over-year basis, housing starts soared 68.8 percent in the West and jumped 12.8 percent in the Northeast. Declines of 16 percent and 1.5 percent were seen in the South and Midwest, respectively.

“We are seeing many positive economic indicators that point to a recovery, including low interest rates, rising demand and an increase in mortgage applications,” said National Association of Home Builders Chairman Dean Mon. “Single-family and multifamily housing production are on an upward path while overall permits, which are a harbinger of future building activity, posted a double-digit gain.”

Permit authorizations in May grew 14.4 percent from the April rate to a SAAR of 1.22 million, but were 8.8 percent lower than a year ago. Single-family authorizations jumped 11.9 percent and permits for housing with five units or more rose 18.3 percent.

Compared to a year ago, permits are 14.8 percent lower in the Northeast, 6.2 percent lower in the Midwest, 2.7 percent lower in the West and 0.8 percent higher in the South.

“The May housing report is consistent with the positive results of the NAHB/Wells Fargo builder sentiment index, and we expect this momentum to continue as economic activity recovers,” said NAHB Chief Economist Robert Dietz. “In another promising sign, single-family permits are up almost 2 percent on a year-to-date basis and builders are bringing back thousands of workers laid off in March and April to meet renewed demand.”