Housing starts slip, permits hit 5-year high

“Meanwhile, overall permits for new construction surpassed the million-unit mark and the number of yet-to-be-used permits rose in April, which is a good indicator that the dip in building activity was likely a temporary pause due partly to unseasonably poor weather conditions.”

While steady job growth and low mortgage rates are lending the housing sector a hand in its recovery, there are still hurdles to a faster pace of construction and a stronger overall recovery.

{mosads}”In particular, limited access to construction credit, tough qualification standards for mortgage borrowers and rising costs for building materials, developable lots and labor are impacting the pace of construction activity,” said Rick Judson, chairman of the NAHB and a home builder from Charlotte, N.C. 

Single-family starts posted a 2.1 percent decline to a seasonally adjusted annual rate of 610,000 units in April, while multifamily starts plunged 38.9 percent to 243,000 units after a 26 percent increase in March. 

Building activity fell in three of the four regions — down 12.8 percent in the Northeast, 27.9 percent in the South and 6.2 percent in the West — but increased 10.9 percent in the Midwest.

But permit issuance was up by double-digits in three of the four areas — the Midwest posted a 22.3 percent increase, the South registered a 16 percent gain and the West posted a 12.9 percent gain. The Northeast dropped by 2 percent. 

Even builder confidence remains high despite fluctuations. 

On Wednesday, the NAHB said its index rebounded in May to 44, up from 41 in April. The outlook for sales reached its highest point since February 2007.

All three index components – current sales conditions, sales expectations and traffic of prospective buyers — posted gains in May.