Permit Requests Up, Housing Starts Down

June 20, 2012

construction hatAccording to the Commerce Department, builders requested the most permits in May since September 2008. Privately-owned housing units authorized by building permits were at a seasonally adjusted rate of 780,000. This marks a 7.9 percent increase from the revised April rate of 723,000. Furthermore, the May numbers are a 25 percent increase from last May. This increase illustrates that builders are optimistic when looking forward to the next 12 months.

Housing starts, however, saw a decline. In May, housing starts were at a seasonally adjusted annual rate of 708,000. This is a 4.8 percent drop from the revised April estimate of 744,000. Yet, compared to May of last year, housing starts are up 28.5 percent.

While housing starts declined overall, much of it was due to the erratic nature of multifamily units, which declined 21.3 percent to 192,000 units. Single-family housing starts rose 3.2 percent in May to 516,000 units resulting in the best pace since last December.

“Today’s report is a good sign that builders are cautiously moving to replenish their depleted inventories of single-family homes in response to increasing buyer demand,” said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB).  “In certain housing markets across the country, the momentum toward recovery is gradually building, though tough credit conditions and inaccurate appraisal values continue to weigh down that progress.”

Housing completions in May were at a seasonally adjusted annual rate of 598,000. This is 10.3 percent drop below the revised April estimate of 667,000, but is 10.1 percent above the May 2011 rate of 543,000.

“The latest data provides evidence of the kind of slow but steady growth that we expect to see in housing production through the end of the year, and shows that housing continues to regain strength regardless of some weakening in other parts of the economy,” said NAHB Chief Economist David Crowe. “Particularly encouraging are the gains in permit issuance posted in both the single-family and multifamily sectors in May, which are indicative of builders’ intentions to start new projects in the coming months.”

About The Author

Read All Stories By Mitch Levinson

Mitch Levinson is the author of “Internet Marketing: The Key to Increased New Home Sales” published by BuilderBooks. He is an Internet marketing expert with expertise in search engine optimization, website development, email marketing, social media and CRM consulting services. He is known for creating effective programs that can be tracked through analytics to prove effectiveness and ROI. Mitch is founder and president of MLC New Home Marketing and MLC FlatFee Realty, as well as managing partner of mRELEVANCE, LLC, a Marketing, Communication, Interactive agency with offices in Chicago and Atlanta. He currently leads the Chicago team. A Multi-Million Dollar Sales Producer who earned an MBA in Computer Information Systems and eCommerce, he brings a unique perspective and experience to the field of real estate communications. Mitch combines the two interests in order to help home builders and developers gain a competitive advantage through the Internet and technology. When he isn’t behind a computer, he enjoys participating in sports and coaching his kids’ teams. Mitch resides in Arlington Heights, Ill., a northwest suburb of Chicago, with his family, which includes two rambunctious labs. Visit my Google+ profile.

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