Housing statistics show a mixed picture for the economy

Housing starts increased 4.3% to an annualized rate of 0.97 million in May, below market forecasts of 1,095 million and only slightly higher than an upwardly revised 0.93 million in April. It is the second-lowest level since 2015, suggesting the housing market recovery will be relatively slow.

The Chart below show the development of housing starts over the past 10 years.

Starts for the volatile multi-family segment jumped 16.9% to 0.29 million while single-family housing which is the largest share of the housing market, edged up 0.1% to 0.67 million. Increases were seen in all regions: the Northeast (82% to 111,000), the Midwest (18.4% to 167,000), the West (12.3% to 283,000) and the South (7.7% to 659,000).

Year-on-year, housing starts tanked by 8.8%, which is a significant decline and should tell us that the nearterm outlook is quite grim. Prices, meanwhile, have stayed quite steady.

Building permits, meanwhile, rose 14.4% from a month earlier to a seasonally adjusted annual rate of 1.220 million in May, after hitting a five-year low in April and compared with market expectations of 1.228 million. Single-family permits were up 11.9% and authorizations for the volatile multi-occupant segment jumped 18.8% to a rate of 475,000. Across regions, permits rebounded in the South (7.7% to 659,000), West (12.3% to 283,000), Midwest (18.4% to 167,000) and Northeast (82.0% 111,000).

Below, building permits over past 10 years:

Based on building permits, the outlook for the housing market is pretty good Compared with the housing starts numbers. Much will depend on the development of the overall economy to determine the strength of housing overall.