U.S. housing starts, permits fall more than expected in May

WASHINGTON, Tue Jun 17, 2014 8:42am EDT

Workers install a roof on a multi-family building in Broomfield, Colorado February 19, 2014. REUTERS/Rick Wilking

Workers install a roof on a multi-family building in Broomfield, Colorado February 19, 2014.

Credit: Reuters/Rick Wilking

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WASHINGTON, (Reuters) - U.S. housing starts and building permits fell more than expected in May, suggesting the housing recovery will likely remain slow for a while.

Groundbreaking for homes fell 6.5 percent to a seasonally adjusted annual pace of 1 million units, the Commerce Department said on Tuesday.

March's starts were revised down to show a 12.7 percent increase instead of the previously reported 13.2 percent rise. Economists polled by Reuters had forecast starts slipping to a 1.03 million-unit rate last month.

Housing is struggling to regain momentum after a run-up in mortgage rates and hefty increases in prices stifled demand. A shortage of properties has also weighed on the sector.

Groundbreaking for single-family homes, the largest part of the market, fell 5.9 percent in May to a 625,000-unit pace, while starts for the volatile multi-family homes segment decreased 7.6 percent to a 376,000-unit rate.

Federal Reserve Chair Janet Yellen said last month there was a risk a protracted housing slowdown could undermine the economy.

Permits to build homes declined 6.4 percent to a 991,000-unit pace in May, pulling back from the 1.06 million units touched in April. Economists had expected permits to dip to a 1.05-million unit pace.

Permits for single-family homes rose 3.7 percent to a 619,000 unit-pace. They continue to lag groundbreaking, suggesting single-family starts could fall in the months ahead.

A survey on Monday showed confidence among single-family home builders increased in June, but fell short of reaching the threshold considered favorable for building conditions.

Permits for multi-family housing tumbled 19.5 percent to a 372,000-unit pace.

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Comments (6)
Simplerman wrote:
That damn weather.

Jun 17, 2014 9:17am EDT  --  Report as abuse
BeRealistic wrote:
So in March when “weather” was still a big factor in all things economic the housing starts were great, but now we know not quite as great as first reported (normal adjustment). But in May, long after the weather factor was a non issue, housing starts are not looking good at all. Yeah, I am “still” buying the weather story…..hard to say that with a straight face. Global warming – responsible for drought and floods, higher and lower temps, melting of ice and the record levels of ice caps, responsible for people working and not working, responsible for everything we(ooops, the left) can’t explain or do not want to take responsibility for.

Don’t you know? Its the weather silly, its our “new religion”.

Jun 17, 2014 9:32am EDT  --  Report as abuse
So housing starts fell more and permits fell a lot more, which will affect next month’s numbers for starts, but the builders felt really good about it? Maybe they were just thankful for the work that they did have? Or maybe they were just thankful the weather was better.

Jun 17, 2014 10:48am EDT  --  Report as abuse
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