by Numbers issued this week show a rebound in single-family and multifamily unit building activity in May compared to April. Still, some figures continue to lag from last year
WASHINGTON — Housing starts for the month of May rose 21.7% from April and 5.7% above May 2022, signaling an uplift in the housing market that could boost furniture sales as those units are completed.
According to Reuters, the May surge was the highest since April 2022, which it reported was at the time the highest since 2006.
Housing starts, which represent groundbreaking activity for new residential construction, totaled 1,631,000, which was 21.7% above the revised April rate of 1,340,000 and 5.7% above the May 2022 rate of 1,543,000.
Single-family housing starts totaled 997,000, which was 18.5% above the revised April rate of 841,000 but 6.6% below the rate of 1,067,000 in May 2022.
The total number of building permits issued for the month of May was 1,491,000, up 5.2% from the revised April rate of 1,417,000. However, this was 12.7% below the rate of 1,708,000 in May 2022. Permits issued for single-family units totaled 897,000, or 4.8% over the revised April rate of 856,000 but were 13.2% below the rate of 1,033,000 in May 2022.
There also were 1,518,000 housing units completed in May, up 9.5% from the revised estimate of 1,386,000 for April, and also 5% above the 1,446,000 units completed in May 2022.
The government reported 1,009,000 single-family units completed in May, up 3.9% from the revised April rate of 971,000 but 3.3% below the revised May 2022 rate of 1,043,000.
The numbers indicate a rebound in housing activity despite still relatively high interest rates. According to Bankrate.com, the average rate for a 30-year fixed mortgage was 6.99% as of Wednesday, which it noted was down 5 basis points from the same time last week. It noted that the national average for a 30-year fixed rate refinance is 7.15%, down 1 basis point from last week.
Thus, the rates of activity from building permits and groundbreakings to completions signify that the market could rebound for home furnishings sales, too, which are tied to home construction.
The numbers also show positive momentum for multifamily units. For example, the number of building permits issued for buildings with five or more units was up 7.8% from April, but down 11.9% from May 2022. Meanwhile, groundbreakings for buildings with five or more units was up 28.1% from April and up 39.6% from May 2022. The number of buildings with five or more units completed was up 24.2% from April, and up 23.9% from May 2022.
All this indicates a strong rental market, although units with five or more units can also include townhouses or condominiums. Regardless, it also indicates that there could be a strong demand for smaller-scale furniture for these multifamily buildings in the coming months and beyond.
By region, the activity was as follows for the month of May:
In the Northeast, there were 136,000 building permits issued in May, up 2.3% from the 133,000 issued in May 2022, and 27.1% above the 107,000 issued in April. There were 100,000 units started in May, down 21.9% from the 128,000 started in May 2022 and down 18.7% from the 123,000 units started in April. There were 115,000 units completed in May, up 11.7% from the 103,000 completed in May 2022, but down 6.5% from the 123,000 completed in April.
In the Midwest, there were 187,000 building permits issued in May, down 19.7% from the 233,000 issued in May 2022, but up 7.5% from the 174,000 issued in April. There were 282,000 units started in May, up 24.2% from the 227,000 started in May 2022 and up 66.9% from the 169,000 started in April. There were also 215,000 units completed in May, up 22.9% from the 175,000 completed in April and down .5% from the 216,000 completed in April.
In the South, there were 815,000 building permits issued in May, down 13.9% from the 947,000 issued in May 2022, but up 1.5% from the 803,000 issued in April. There were 908,000 units started in May, up 6.7% from the 853,000 started in May 2022 and up 20.3% from the 755,000 units started in April. The number of units completed totaled 852,000, up 7.7% from the 793,000 units completed in May 2022 and up 15.8% from the 736,000 units completed in April.
In the West, there were 67,000 permits issued in May, down 1.5% from the 68,000 issued in May 2022 but up 1.5% from the 66,000 issued in April. There were 341,000 units started in this region, up 1.2% from 337,000 started in May 2022 and up 16.4% from the 293,000 started in April. There were 336,000 units completed in May, down 10.9% from the 377,000 completed in May 2022 but up 8% from the 311,000 completed in April.
