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New privately-owned housing units authorized by permits and new housing starts began to bounce back in May, from their COVID-19-fueled free fall, according to data released Wednesday by the U.S. Census Bureau.
“With economies reopening, home builders are slowly regaining traction in their goal to match surging buyer demand,” Bill Banfield, Quicken Loans’ executive vice president of capital markets said in a statement. “Last month’s increase in construction will help ongoing inventory issues and it’s encouraging to see low-interest rates support buyer demand.”
Housing units authorized by permits climbed 14.4 percent, from April to May, but were still 8.8 percent below 2019 levels. Single-family homes authorized by permits were up 11.9 percent month-over-month.
Housing starts were up 4.3 percent month-over-month, but still 23.2 percent below the May 2019 rate. Single-family housing starts only jumped 0.1 percent month-over-month.
Privately-owned housing completions were the only metric that continued to lag, likely due to lockdown restrictions being lifted in phases. Housing compositions were down 7.3 percent month-over-month and 9.2 percent year-over-year. Single-family housing completions were down 9.8 percent month-over-month.
“While positive compared to April, May’s results do not seem to fully reflect the remarkable resilience the housing market has shown over the past several weeks,” Scott Volling, a principal at PricewaterhouseCoopers, said in a statement.
“When the pandemic hit in March, many builders slowed or stopped their land purchase programs and some were slower to resume than others,” Volling added. “Based upon the positive trends reflected in other housing market metrics I would expect to see a more significant increase in starts and permits when June’s results are released next month.”