Steel Markets

Housing Starts Decline in May

June 17, 2019

Housing starts dipped slightly in May, inching down 0.9 percent from April’s revised rate to a seasonally adjusted annual rate of 1,269,000. Starts were 4.7 percent below the May 2018 rate. Single-family starts led the decline, falling 6.4 percent from April to a SAAR of 820,000, while housing of five units or more jumped 13.8 percent to 436,000.

The South was the only region to post positive growth at 11.2 percent in May. Starts fell 45.5 percent in the Northeast, 8.0 percent in the Midwest and 2.4 percent in the West.

“The decline in single-family starts is off a solid upward revision in April,” said Danushka Nanayakkara-Skillington, National Association of Home Builders associate vice president of forecasting and analysis. “This is another indicator that ongoing builder supply-side concerns are making it more difficult to build homes at affordable price points. We expect single-family housing starts to remain flat through 2019.”

Building permit authorizations were nearly unchanged in May, gaining 0.3 percent from April, but slipping 0.5 percent from a year ago. Single-family authorizations grew 3.7 percent sequentially to a rate of 815,000, while buildings with five units or more declined 3.7 percent to a SAAR of 442,000.

Permit authorization expanded in the South and West, gaining 6.8 percent and 1.8 percent, respectively. Authorizations, however, plummeted 24.6 percent in the Northeast and fell 8.4 percent in the Midwest.

“The rise in single-family permits echoes the stabilization we are seeing in our builder confidence survey,” said NAHB Chairman Greg Ugalde. “While the increase in permits is a positive sign for the housing market, there are still affordability concerns throughout the country, especially in high-cost areas.”