New home construction in the United States showed a positive return in May—good news after several months of decreasing numbers due in part to the coronavirus pandemic.
In particular, a rebound in permits for future home construction (up 14.4%) showed promise that the industry might be coming out of a slump. The statistic is often an indicator of future activity and the overall health of the economy.
Economists have suggested over recent months that the housing market could help lead the U.S. economy out of the current crisis, which opened with extremely low mortgage rates.
Here's the numbers you need to know:
- Housing starts rose 4.3% to a seasonally adjusted rate of 974,000 units in May after declining 26.4% in April and 19% in March.
- Though starts were down 23.3% year over year in May, the increase was still positive considering the past few months.
- Single-family housing increased 0.1% to a rate of 675,000 units.
- Multifamily housing increased 15% to a rate of 299,000 units.
- Housing starts were across the board by region. Starts increased a whopping 69.8% in the West and 12.8% in the Northeast. However, in the South—traditionally the biggest market for residential—starts were down 16%. The Midwest saw a 1.5% drop in May.
- Permits for future residential construction were up 14.4%, at a rate of 1.220 million units.
- Single-family permits increased 11.9% to a rate of 745,000 units.
- Multifamily permits increased 18.8% to a rate of 475,000 units.
Click here to read more from the Commerce Department's release.