Housing starts dropped sharply in May but permits hit 8 year high

Housing starts dropped sharply in May but permits hit 8 year high

New figures from the US Department of Housing and Urban Development and the Commerce Department show that housing starts dropped by 11.1 per cent in May to a seasonally-adjusted annual rate of 1.036 million units. The decline followed an upwardly-revised April reading. New permits were up by 11.8 per cent in the month to a new 8-year high rate of 1.275 million. “The uptick in permits shows our builders are optimistic that more consumers are returning to the housing market,” said NAHB chairman Tom Woods. “Even with this month’s dip in production, it should be a solid year for home building.”

The dip in new starts was expected after the higher April figures and NAHB chief economist David Crowe said that the outlook is positive: “The starts and permits figures for the second quarter of 2015 are shaping up to be stronger than the first. This upward trajectory is in line with the recently released NAHB/Wells Fargo HMI, which found growing builder confidence in the market.”
Combined single- and multifamily starts fell in all four regions in May. The Northeast, Midwest, South and West posted respective losses of 26.5 per cent, 10.2 per cent, 5 per cent and 12.5 per cent.

Commercial, multi-family mortgage debt still rising
The level of mortgage debt outstanding for commercial and multi-family properties increased in the first quarter of 2015, rising $40.4 billion which is 1.5 per cent higher than the last quarter of 2014. The Mortgage bankers Association says that there was a total of $2.68 trillion outstanding at the end of the first quarter. “Strong first quarter mortgage originations boosted the level of commercial and multifamily mortgage debt outstanding,” said MBA’s Jamie Woodwell. “Multifamily mortgages continued to grow even more quickly than the market as a whole, with banks increasing their portfolios by $8 billion and agency and GSE portfolios and MBS increasing their holdings by $10 billion.”

New May record for home sales in Southern Georgia
Home sales in Southern Georgia has reached a new record high for May after increasing 1 per cent from the same month last year. The total number of sales for the month through the MLS was 311. Year-to-date sales are also close to a record having increased by 15.6 per cent in the first five months of this year compared to the same period in 2014. The level of new listings was down in May to 682 units, 25.1 per cent lower than last year. Overall listings were 26.3 per cent lower than last year with 1,676 active listings on the MLS.