May housing starts fell 11.1% from an elevated April to a seasonally-adjusted annual rate of 1.036 million units. The drop was broad based, falling 5.4% in single-family to an annual rate of 680,000 and multifamily falling 20.2% to 356,000. When viewed from a quarterly average, however, the first two months of the second quarter were better than the first quarter for both single- and multifamily starts: single-family up 9% and multifamily up 20%.
Furthering the upswing signals, building permits were up 11.8% to a seasonally-adjusted annual rate of 1.275 million, the highest since August 2007. The surge is concentrated in the Northeast where multifamily permits doubled from 130,000 per year to 264,000 per year and ahead of the 2014 rate of 64,000. Multifamily permit were also up in the Midwest (34%) but down in the South (-12.4%) and West (-8.1%).
Individual metropolitan permit data is available one month later than national figures and those data through April show substantial increases in multifamily permits over the same four month period in 2014 for New York metropolitan area (50%), Boston (56%), Pittsburgh (142%) and Albany (215%).
Single-family starts were up in every region when viewed from a two-month average and compared to the first quarter average. The Northeast was up 35.4% to a recent two-month average of 55,500 homes. The Midwest was up 26.1% to a recent average of 113,500 homes while the South made the smallest advance at 1.5% to 365,500 homes. The West was up 8.6% to a recent average of 165,000 homes.
Confirming an underlying advance, the NAHB/Wells Fargo Housing Market Index rose 5 points to 59 as builders increased their expectations for future sales.