U.S. housing starts fall to
eight-month low
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[June 16, 2017]
WASHINGTON,
(Reuters) - - U.S. homebuilding fell for a third straight month in May
to the lowest level in eight months as construction activity declined
broadly, which could raise concerns that the housing market recovery was
faltering.
Housing starts dropped 5.5 percent to a seasonally adjusted annual rate
of 1.09 million units, the Commerce Department said on Friday. That was
the lowest level since September 2016.
April's sales pace was revised down to 1.16 million units from the
previously reported 1.17 million units. Economists polled by Reuters had
forecast groundbreaking activity rising to a rate of 1.22 million units
last month.
Homebuilding fell 2.4 percent on a year-on-year basis. Single-family
homebuilding, which accounts for the largest share of the residential
housing market, decreased 3.9 percent to a pace of 794,000 units last
month, also the lowest level in eight months. Since racing to a near
9-1/2-year high in
February, single-family home construction has lost momentum.
![](http://archives.lincolndailynews.com/2017/Jun/16/images/ads/current/stacy_sda_101816.png)
Economists blame the moderation on supply constraints rather than demand
for housing, which remains underpinned by a strong labor market. The
unemployment rate of 4.3 percent, which is a 16-year low, is gradually
lifting wages for workers. While mortgage rates have risen, they remain
low by historical standards.
A survey on Thursday showed a dip in homebuilder confidence in June,
with homebuilders expressing frustration over ongoing shortages of
skilled labor and building lots.
In May, single-family starts surged 12.5 percent in the Northeast and
jumped 9.5 percent in the Midwest. But they tumbled 8.9 percent in the
South and dropped 4.9 percent in the West.
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![](../images/061617pics/busine39.jpg)
A real estate sign advertising a new home for sale is pictured in
Vienna, Virginia, U.S. October 20, 2014. REUTERS/Larry Downing/File
Photo
![](http://archives.lincolndailynews.com/2017/Jun/16/images/ads/current/graue_17_malibu_022717.png)
Last
month, starts for the volatile multi-family housing segment declined 9.7 percent
to a rate of 298,000 units. Multi-family housing starts have now declined for
five straight months.
With rental increases appearing to have leveled off after strong gains over the
last few years, there is probably limited room for strong growth in the
construction of multi-family homes.
Building permits last month fell 4.9 percent to a pace of 1.17 million units,
the lowest level since April 2016. That suggests homebuilding could remain weak
in the coming months.
((Reporting by Lucia Mutikani; Editing by Paul Simao); ((Lucia.Mutikani@thomsonreuters.com;
1 202 898 8315; Reuters; Messaging: lucia.mutikani.thomsonreuters.com@reuters.net)))
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