WASHINGTON (MNI) - The pace of housing starts fell by 5.5% to a 1.092 million seasonally adjusted annual rate in May, well below expectations for a rebound to a 1.225 million pace and the slowest pace since September, data reported by the Commerce Department Friday morning showed.
There were downward revisions to the pace of starts in the previous two months, with April starts revised down to 1.156 million and March starts revised down to 1.189 million, resulting in three consecutive monthly declines.
Housing starts of single-family homes fell by 3.9% in May after a 0.2% rise in the previous month. Starts of multi-family homes fell 9.7%, based on an MNI calculation.
The pace of unadjusted starts stands 2.6% below its year ago level, suggesting home building has paused. A small decline in the NAHB index released on Thursday suggests builders confidence cooled, but remains high.
Building permits fell 4.9% to a 1.168 million annual rate, the slowest pace since April 2016. Both single-family and multi-family permits declined
Through the first two months of second quarter, starts have averaged 1.124 million, slower than the 1.238 million average in the first quarter. Permits have averaged 1.198 million through the first two months of the second quarter, down from 1.260 million in the first quarter, suggesting that home building will be a drag on second quarter GDP.
