Highlights
Building permits reach 1.5 million, up 5.2% from April.
Housing starts surge by 21.7% in May, reaching 1.6 million.
Housing completions rise by 9.5% to 1.5 million in May.
Overview
The U.S. Census Bureau and the U.S. Department of Housing and Urban Development have released the latest statistics on new residential construction for May 2023. The data reveals encouraging trends in building permits, housing starts, and housing completions.
Strong Growth in May Building Permits
Building permits for privately-owned housing units authorized in May reached a seasonally adjusted annual rate of 1,491,000. This represents a 5.2 percent increase from the revised April rate of 1,417,000. However, it is important to note that this figure is still 12.7 percent below the May 2022 rate of 1,708,000. Single-family authorizations experienced a positive growth rate of 4.8 percent, rising from the revised April figure of 856,000 to 897,000. Additionally, authorizations for units in buildings with five units or more reached a rate of 542,000 in May.
Robust Growth in May Housing Starts
Housing starts in May demonstrated even more robust growth, with a seasonally adjusted annual rate of 1,631,000. This marks a significant 21.7 percent increase (±14.8 percent) from the revised April estimate of 1,340,000. Furthermore, it represents a 5.7 percent rise (±10.8 percent) compared to the May 2022 rate of 1,543,000. Single-family housing starts were particularly impressive, reaching a rate of 997,000, reflecting an 18.5 percent surge (±14.1 percent) from the revised April figure of 841,000. Housing starts for units in buildings with five units or more reached a rate of 624,000 in May.
Positive Growth in Housing Completions
Housing completions also displayed positive growth in May, reaching a seasonally adjusted annual rate of 1,518,000. This represents a 9.5 percent increase (±12.3 percent) from the revised April estimate of 1,386,000. Similarly, it reflects a 5.0 percent rise (±13.0 percent) compared to the May 2022 rate of 1,446,000. Single-family housing completions reached a rate of 1,009,000, exhibiting a 3.9 percent increase (±13.9 percent) from the revised April rate of 971,000. Housing completions for units in buildings with five units or more reached a rate of 493,000 in May.
Promising Growth Signals in May’s Residential Construction Sector
Overall, the new residential construction sector in May 2023 demonstrated positive growth across various metrics. Building permits, housing starts, and housing completions all showed encouraging signs. This indicates a potentially thriving real estate market and may provide opportunities for investors and homebuyers alike.
In terms of a short-term forecast, the bullish trend observed in May suggests continued growth and momentum in the coming months. However, it’s essential to monitor market dynamics and factors such as supply and demand to assess the sustainability of this positive trajectory.
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