Total housing starts posted a 0.9 percent decrease in May (1.269 million units) compared to an upwardly revised April estimate of 1.281 million units, according to the joint data release from the Census Bureau and HUD. Relative to May 2018, total starts are 4.7 percent below the annual pace of 1.332 million units.
Single-family production in May posted a monthly decline, decreasing 6.4 percent to a seasonally adjusted annual rate of 820,000. Single-family starts in April were revised up to 876,000 units. The three-month moving average for single-family in May is 843,000 units.
On a year-to-date basis, single-family starts are 5.1 percent lower as of May relative to the first five months of 2018. Single-family permits, a useful indicator of future construction activity, rose 3.7 percent in May (815,000 units) compared to April but have registered a 5.8 percent loss thus far in 2019 compared to last year. This is in line with the NAHB/Wells Fargo Housing Market Index, which held builder confidence in the market for newly-built single-family homes steady at 64 in June but remains lower on a year-over-year basis.
Regional data show, on a year-to-date basis, positive conditions for single-family construction only in the South (+0.5 percent). Single-family construction is down 13.0 percent in the West, 11.9 percent in the Midwest, and 6.8 percent in the Northeast.
Multifamily starts (2+ unit production) posted an increase of 10.9 percent in May to a 449,000 annual rate compared to April. After a slow start to the year, multifamily development is moving closer to our forecast of leveling-off conditions. On a year-to-date basis, multifamily 5+ unit production is down 5.2 percent thus far in 2019, while multifamily 5+ unit permitting is trending higher with an increase of 2.9 percent relative to the first five months of 2018.