Housing starts and building permits have reached a plateau not seen in over five years at just over 900,000 new homes and permits annually, indicating the home construction revival remains on track if not accelerating.
Construction started on 914,000 new homes at an annual rate in May, less than the 950,00 estimated by economists in the Reuters poll but 6.8% ahead of the revised 856,000 unit pace in April, according to the Commerce Department. Building permits retracted 3.1% to 974,000 annually as predicted, down from the revised 1.005 million total in April, which was the highest annual pace in almost five years.
Since breaking above 800,000 units annually last September housing starts have averaged 909,000 a month in the longest sustained period of moderate growth since the first half year of 2008. Permits for multi-family units dropped but single-family requests reached their highest level in five years.
Over the past thirty years housing starts have averaged a 1.41 million annually each month.
Building permits have averaged 937,000 a month in annual applications since first topping 900,000 last September. This is also the best performance since the beginning of 2008. The historical monthly average over the last thirty years has been 1.4 million annually.
Construction started on 599,000 single family homes at an annual rate in May a 0.3% increase and multi-family starts rose 21.6% to a 315,000 rate.
Chief Market Strategist