U.S. Housing Starts Jump in May

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Housing starts in the U.S. increased 6.8 percent in May from April, providing more optimism about a general housing recovery.

The number of starts rose to an annual rate 914,000, 28.6 percent higher than the rate of 711,000 in May 2012, according to the Department of Housing and Urban Development statistics released today. 

The number of starts was below a prediction of 950,000 by a Dow Jones Newswires survey of economists, according to the Wall Street Journal.

"The outlook for housing continues to brighten as builders respond to increased demand for new homes and rental apartments," said National Association of Home Builders chairman Rick Judson. "While challenges with regard to the cost and availability of building materials, lots and labor are still keeping the pace of improvement in check, both builders and consumers are more confident about their prospects in the current marketplace." 

The number of building permits requested fell 3.1 percent to an annual pace of 974,000 in May. However, the number is 20.8 percent higher than the estimate of 806,000 a year ago. 

The new report illustrates the steady recovery of the housing market. Yesterday, the National Association of Home Builders reported confidence in home builders reached a seven-year high. 

After an "over-correction" in April, construction on multifamily projects increased 21.6 percent to an annual rate of 315,000. Out of four regions, the South reported a 17.8 percent increase and the West reported a 5.7 percent gain.

Single-family starts were unchanged for the month, but the number of permits issued rose 1.3 percent to 622,000 units in May -- the best pace in five years.

The housing market continues to benefit from low inventory and below-peak prices, although both measures continue to rise.