U.S. new-home construction rose more than projected in May to the fastest pace in more than a decade while permits cooled for a second month, indicating mixed progress in the supply-constrained housing market, government figures showed Tuesday.
The increase in groundbreaking was concentrated in the Midwest, the only region to see a gain in May, as starts jumped 62.2 per cent to 266,000 — the highest since 2006. The other three regions saw declines, though the drop was only 0.9 per cent in the biggest area, the South.
Permits rose in the Northeast and Midwest, consistent with the view that national demand for housing remains solid. That reflects the support that prospective buyers are getting from a strong labour market, lower taxes and improved finances.
-Single-family home starts rose to a 936,000 rate, highest since November, from 901,000 the prior month
-Groundbreaking on multi-family homes, such as apartment buildings and condominiums, rose to an annual rate of 414,000 from 385,000; data on these projects can be volatile
-Some 159,000 homes were authorized but not yet started in May, down 1.2 per cent from the prior month; the number of homes currently under construction rose to 1.13 million, the highest since July 2007
-Report shows wide margin of error, with a 90 per cent chance that the May figure ranged from a 5.2 per cent drop to a 15.2 per cent gain
-Report released jointly by the Census Bureau and Department of Housing and Urban Development in Washington