May Housing Starts Fall 0.9% from April; Pending Home Sales Index Drops

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U.S. housing starts in May were down once again, falling 0.9% compared with April and down 4.7% from May 2018, according to the U.S. Census Bureau and the Department of Housing and Urban Development.

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Housing starts in May totaled a seasonally adjusted annual rate of 1,290,000, down from 1,281,000 in April and 1,332,000 in May 2018.

Meanwhile, the May rate for units in buildings with five units or more reached 436,000.

As for building permits, privately owned housing units authorized in May reached a seasonally adjusted annual rate of 1,296,000, which marked a 0.3% increase from April’s 1,290,000 units but a 0.5% decline from May 2018’s 1,301,000 units.

Single‐family authorizations in May reached 815,000, up 3.7% from April’s 786,000. For buildings with five units or more, authorizations reached 442,000 in May.

Lastly, privately owned housing completions in May reached 1,213,00 units, marking a 9.5% decrease from April’s estimated 1,340,000 completions and a 2.8% decrease from May 2018’s 1,248,000 units.

Single‐family housing completions in May reached 890,000, down 5.0%  from the revised April rate of 937,000. Meanwhile, the May rate for buildings with five or more units reached 319,000.

In other housing market news, the National Association of Realtors (NAR) reported May 30 that April pending home sales fell in that month after posting growth in March.

NAR’s Pending Home Sales Index, which is based on contract signings, dropped 1.5% in April, down to 104.3 from March’s 105.9. On a year-over year basis, the Pending Home Sales Index dropped 2.0%, marking the 16th consecutive month of annual decreases, according to NAR.

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“Though the latest monthly figure shows a mild decline in contract signings, mortgage applications and consumer confidence have been steadily rising,” said Lawrence Yun, NAR’s chief economist. “It’s inevitable for sales to turn higher in a few months.

“Home price appreciation has been the strongest on the lower-end as inventory conditions have been consistently tight on homes priced under $250,000. Price conditions are soft on the upper-end, especially in high tax states like Connecticut, New York and Illinois.”

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