Total building permits decreased 3.1% to a 974,000 million annualized rate in May, reflecting a 10% slump in applications for multifamily dwellings, today’s Commerce Department report showed.
Construction of single-family houses rose 0.3% to a 599,000 rate from 597,000 the prior month. Work on multifamily projects such as apartment buildings increased 21.6% to an annualized rate of 315,000.
Two of four regions had an increase in starts last month, including a 17.8% jump in the South and a 5.7% gain in the West. Construction dropped 13.7% in the Midwest, which may have been due to wetter-than-normal weather in the region.
“The volatility is probably mostly due to weather,” Vitner said. “The spring was a little damper than usual and that has had a larger impact on starts than it has had on permits.”
Last month, precipitation across the contiguous U.S. was 0.47 inches above average, and the wettest May since 1995, according to the National Oceanic and Atmospheric Administration. Most of the northern U.S. had above-average precipitation. Iowa had its wettest May ever.
Builders such as West Lake Village, California-based Ryland Group Inc., which reported a first-quarter profit for the first time in six years, still see further strides for housing.
“There is no market that is not active today, which is another good sign,” Chief Executive Officer Larry T. Nicholson said in a June 13 presentation. “There’s a huge opportunity for demand that’s sitting on the sidelines that can’t buy a house today, because they have some ding on their credit.”