Homebuilding soared in May
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We imagine a number of economic forecasters spit out their coffee when the latest housing starts data crossed the tape.
Why it matters: New home construction rose at a 1.6 million annualized rate in May — a strong rate that points to rapidly rebounding homebuilding activity.
- Housing starts were about 22% above April, with big jumps in the construction of single-family and multifamily homes, the Census Bureau said.
Details: There were upbeat signs that strong homebuilding rates could continue. Building permits, an indicator of future construction, rose to an annualized rate of nearly 1.5 million. That's 5% above April's rate, though still slower than the rate seen in May 2022.
What they're saying: "Builders got a head start on the summer sales season in anticipation of improved demand for both single-family homes and apartments," Ben Ayers, a senior economist at Nationwide, said in a note.
- "While headwinds for housing demand remain, the lack of options in the market for existing homes is driving more interest in new builds and boosting sentiment among builders," he adds.
The bottom line: More housing supply coming online could ease price pressures that resulted from the decades-long shortages.
