According to analysts from Wells Fargo, today’s Housing Starts report suggests that starts are likely to languish near their current levels for another few months.
“Housing starts once again turned in a disappointing performance, with single-family starts falling 3.9 percent and multifamily starts falling 9.7 percent. Permits also declined both at the single-family and multifamily level, suggesting there is more at play than some temporary statistical issue. Even with another weak month, starts are still running 3.2 percent ahead of their year ago pace through May.”
“May’s 3.9 percent drop in single-family starts and 1.9 percent drop in single-family permits is perplexing, particularly given that builders are selling homes as fast as they can deliver them.”
“Worker shortages may be a growing issue, with the number of single-family homes authorized but not started rising 4.0 percent in May and surging 14.7 percent over the past year. Apartment construction is clearly declining, however.”